WORLDCORP INC, 10-K, 1995-03-31

WORLDCORP INC
10-K, 1995-03-31
AIR TRANSPORTATION, NONSCHEDULED

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================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

--------------

For the fiscal year ended: December 31, 1994 Commission File Number 1-5351

WORLDCORP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 94-3040585
(State of incorporation) (I.R.S. Employer Identification Number)

13873 Park Center Road, Suite 490, Herndon, VA 22071
(Address of Principal Executive Offices)
(703) 834-9200
(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered
------------------- -----------------------------------------

Common Stock par value $1.00 per share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------

State by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

The aggregate market value of the Common Stock held by non-affiliates of the
registrant on March 20, 1995, was approximately $132,342,957.

The number of shares of the registrant's Common Stock outstanding on March 20,
1995 was 15,795,743.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of WorldCorp, Inc.'s Notice of Annual Stockholder's Meeting and Proxy
Statement, to be filed within 120 days after the end of the registrant's fiscal
year, are incorporated into Part III of this Report.

================================================================================

1
<PAGE>

WORLDCORP, INC.

1994 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

Item 1. Business....................................... 3

Item 2. Properties..................................... 9

Item 3. Legal Proceedings.............................. 9

Item 4. Submission of Matters to a Vote of Security
Holders........................................ 9

Item 5. Market for Registrant's Common Stock and
Related Security Holder Matters................ 10

Item 6. Selected Financial Data........................ 11

Item 7. Management's Discussion and Analysis of
Financial Condition and
Results of Operations.......................... 12

Item 8. Financial Statements and Supplementary Data.... 21

Item 9. Changes in and Disagreements with Accountants
on Accounting
and Financial Disclosure....................... 47

Item 10. Directors and Executive Officers of the
Registrant..................................... 47

Item 11. Executive Compensation......................... 48

Item 12. Security Ownership of Certain Beneficial
Owners and Management.......................... 48

Item 13. Certain Relationships and Related Transactions. 48

Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K............................ 49
</TABLE>

2
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PART I

ITEM 1. BUSINESS
-----------------

WorldCorp, Inc., a Delaware corporation ("WorldCorp" or the "Company"), was
organized in March 1987 to serve as the holding company for World Airways, Inc.,
a Delaware corporation ("World Airways"), which was organized in March 1948 and
is the predecessor to the Company. Currently, WorldCorp operates in two
business areas: air transportation services and transaction processing.

WorldCorp's air transportation subsidiary, World Airways, is a leading
worldwide provider of air transportation for commercial and government
customers. World Airways was a wholly-owned subsidiary in 1993. In February
1994, pursuant to an October 1993 agreement, the Company sold 24.9% of its
ownership to MHS Berhad ("MHS"), a Malaysian aviation company. Effective
December 31, 1994, the Company increased its ownership in World Airways to 80.1%
through the purchase of 5% of World Airways common stock held by MHS.

WorldCorp's transaction processing business consists of its ownership
interest in US Order, Inc. ("US Order"), a company which designs, develops and
markets transaction processing software, interactive applications, customer
support services and enabling hardware for two industries: home banking and
telephone company intelligent network services. In December 1993, US Order
completed a $12.0 million private equity placement. On August 1, 1994, US Order
sold its electronic banking and bill payment operations to VISA International
Services Association, Inc. ("VISA"). As of December 31, 1994, WorldCorp owned
52% of the voting stock of US Order. In addition, WorldCorp exercised an option
to purchase additional shares of the voting stock of US Order for consideration
equal to $3.9 million which increased its voting ownership percentage to 89% in
February 1995 (see "Management's Discussions and Analysis of Financial Condition
and Results of Operations - Business Trends").

The principal executive offices of WorldCorp are located at Washington Dulles
International Airport in The Hallmark Building, 13873 Park Center Road, Herndon,
Virginia 22071. WorldCorp's telephone number is (703) 834-9200.

Air Transportation

World Airways is a certificated air carrier, operations of which are limited
to the air transportation industry ("Airline Operations"). Airline Operations
accounted for 100% of the Company's operating revenue and operating income in
1986 through 1991. In 1992, 1993, and 1994, revenue from other business areas
represented less than 1% of the Company's total operating revenues. World
Airways provides supplemental air transportation to major international
airlines, freight forwarders, small package shippers, international vacation
tour operators and the U.S. government. World Airways' customers purchase the
use of the entire aircraft and then sell either passenger seats or cargo space
directly to their customers. In most cases, World Airways' customers assume the
risk of filling the aircraft with passengers or cargo. In addition, World
Airways has obtained regulatory approval from the Government of Israel to
operate a scheduled service between New York and Tel Aviv commencing in July
1995.

World Airways uses several quick-change passenger/cargo convertible aircraft
to target different seasonal peaks throughout the year and to respond rapidly to
demands for supplemental airlift which arise on short notice, such as Operation
Desert Storm. World Airways' fleet of MD-11 and DC10-30 aircraft appeal to
customers who desire long-range, non-stop, international service. Some of World
Airways' competitors fly shorter-range aircraft which must make inconvenient and
time-consuming refueling and technical stops.

World Airways uses specialized operating techniques in pursuit of its
strategic objective of maintaining consistently high levels of on-time
reliability. For example, World Airways implements programs that are designed
to maintain World Airways' aircraft to exacting standards, has converted most of
its fleet to new, state-of-the-art MD-11 aircraft, extensively trains all flight
and technical personnel, and carries maintenance representatives and extensive
spare parts kits on board its aircraft.

On October 30, 1993, WorldCorp, World Airways, and MHS Berhad ("MHS") entered
into a stock purchase agreement (the "Stock Purchase Agreement") pursuant to
which MHS, subject to satisfactory completion of its due diligence
investigations, agreed to purchase 24.9% of World Airways' common stock. At the
time of the signing of the Stock Purchase Agreement, World Airways was a wholly
owned subsidiary of WorldCorp. On February 28,

3
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1994, WorldCorp, World Airways, and MHS concluded the transaction according to
the terms described above. Effective December 31, 1994, WorldCorp purchased 5%
of World Airways' common stock held by MHS, increasing its ownership to 80.1%.
In addition, MHS acquired, in 1994, 32% of Malaysian Airline System Berhad
("MAS"), the flag carrier of Malaysia. MAS is one of World Airways' largest
commercial customers.

Aviation Fuel
-------------

The Company's source of aviation fuel is primarily from major oil companies,
under annual delivery contracts, at often frequented commercial locations, and
from United States military organizations at military bases. The Company's
current fuel purchasing policy consists of the purchase of fuel within seven
days in advance of all flights based on current prices set by individual
suppliers. More than one supplier is under contract at several locations.

The Company purchases no fuel under long-term contracts nor does the Company
enter into futures or fuel swap contracts. Although the crisis in the Persian
Gulf resulted in substantially higher fuel prices during the third and fourth
quarters of 1990 and the first quarter of 1991, the Company has experienced no
difficulty purchasing fuel during the past four years and does not expect
availability to be a problem in the foreseeable future. The availability and
price of aviation fuels remain subject to the various unpredictable economic and
market factors that affect the supply of all petroleum products.

The Company manages fuel price risk by making the Company's customers
responsible (in all of the Company's contracts) for potential fuel price
fluctuations in excess of five percent. Although rapidly escalating fuel costs
may cause a decrease in the overall level of activity in the industry, the
Company does not anticipate that any future industry-wide energy problems would
have a substantial adverse effect upon the profitability of Airline Operations.

Seasonality
-----------

The contract air carrier transportation business is significantly affected by
seasonal factors. Typically, Airline Operations experience lower levels of
utilization during the first quarter as demand for passenger and cargo services
are lower relative to other times of the year. Airline Operations generally
experience higher levels of utilization in the second and third quarters due to
demand for commercial passenger service including the annual Hadj pilgrimage.
Fourth quarter utilization generally depends upon the overall world economic
climate, global trade patterns and the resulting demand for air cargo services.
Airline Operations experienced soft demand and weak yields in worldwide cargo
and passenger markets in the fourth quarters of 1994, 1993, and 1992. The
quarterly financial data is contained in Note 20 "Unaudited Quarterly Results"
of the Company's Notes to Consolidated Financial Statements in Item 8.

Customers
---------

Significant customers of WorldCorp's Airline Operations are the U.S. Air
Mobility Command ("AMC"), MAS, and P.T. Garuda Indonesia ("Garuda"). The loss
of any of these customers or a substantial reduction in business from any of
these sources, if not replaced, would have a material adverse effect on the
Company.

AMC has awarded annual contracts to World Airways since 1956. World Airways'
current annual contract with AMC will expire in September 1995. The minimum
contract amount for 1995 of $33.4 million is a 73% increase over 1994, and will
be augmented by further expansion business. Expansion business totalled 92% of
the minimum contract amount for 1994 and 161% for 1993. World Airways cannot
determine how any future cuts in military spending may affect future operations
with AMC.

World Airways has provided service to MAS since 1981, providing aircraft for
integration into MAS' scheduled passenger and cargo operations as well as
transporting passengers for the annual Hadj pilgrimage. MHS, which owns 19.9%
of World Airways as of December 31, 1994, acquired a 32% ownership interest in
MAS from the Malaysian government during 1994. As a result of the
strengthening of the MHS/MAS relationship, World Airways recently entered into a
series of long-term contracts with MAS. World Airways has agreed to provide
five aircraft to MAS under long-term contracts with expirations ranging from
March 1997 to September 2000 (see "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Business Trends"). As a result
of these contracts, World Airways expects that the percentage of its total
revenue generated from MAS in

4
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1995 will increase significantly over historical levels. The current MAS Hadj
contract, which was entered into in 1992, expires in 1996. In 1993, World
Airways provided two aircraft for Hadj operations. World Airways expects to
provide three aircraft for the 1995 MAS Hadj operations.

World Airways has provided service to Garuda since 1988 under an annual
contract. World Airways provided six aircraft for the 1994 Garuda Hadj
operations and expects to provide five aircraft for the 1995 operations. In
addition, World Airways has provided aircraft for Garuda's cargo operations in
previous years.

The information regarding major customers and foreign revenue is contained in
Note 17 "Segment Information" of the Company's Notes to Consolidated Financial
Statements in Item 8.

Information concerning classification of products within the air
transportation industry comprising 10% or more of the Company's consolidated
operating revenues is presented in the following table (in millions):

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1994 1993 1992
------- ------ ------
<S> <C> <C> <C>

Contract Revenue - Passenger $156.9 $171.6 $149.7
Contract Revenue - Cargo 39.3 28.9 45.5
</TABLE>

Competition
-----------

The Company's Airline Operations compete to varying degrees for commercial
contract revenue with other air carriers and, indirectly, suppliers of surface
transportation. The Company believes that the basis for competition is price,
availability of scheduled passenger air transportation to a destination, speed
of delivery for cargo, and performance characteristics of aircraft. In
addition, other competitors could choose to enter contract flight services at
any time, thereby significantly increasing competition.

The allocation of military air transportation contracts by AMC is based upon
the number and type of aircraft a carrier, alone and/or through joint venture,
makes available to the Civil Reserve Air Fleet ("CRAF"). An increase by other
air carriers in their commitment of aircraft to the CRAF, a reduction in the
number of aircraft controlled by the Company, a reduction of AMC's air
transportation requirements or federal appropriations for such purpose, the
failure to renew joint venture arrangements, or a change in AMC's policy
concerning the method of awarding AMC contracts, among other things, could
adversely affect the amount of AMC contracts, if any, which are awarded in
future years.

Regulatory Matters
------------------

All certificated air carriers, including the Company's Airline Operations,
are subject to regulation by the Federal Aviation Administration (the "FAA")
under the Federal Aviation Act of 1958, as amended (collectively the "Federal
Aviation Act"). Generally, the FAA has regulatory jurisdiction over flight
operations, including equipment, personnel, maintenance, and other safety
matters. To assure compliance with its operational standards, the FAA requires
air carriers to obtain operating, airworthiness and other certificates, which
may be suspended or revoked for cause. The FAA also conducts safety audits and
has the power to impose fines and other sanctions for violations of airline
safety regulations. Under the Act, the Department of Transportation has
jurisdiction over certain aviation matters such as antitrust concerns (mergers,
acquisitions and unfair competitive practices), accounts and records, and
international routes and fares. Additionally, foreign governments assert
jurisdiction over air routes and fares to and from the United States, airport
operation rights and facilities access.

Airline Operations must comply with FAA noise standard regulations
promulgated under the Federal Aviation Act, as amended by the Noise Control Act
of 1972 and the Quiet Communities Act of 1978, and with Environmental Protection
Agency engine emissions regulations promulgated under the Clean Air Act of 1970,
as amended. In addition, certain of the operations of World Airways are subject
to laws and regulations relating to the disposal of hazardous wastes.

Certain airport operations have adopted local regulations which, among other
things, impose curfews and noise abatement regulations.

5
<PAGE>

By virtue of the extensive use of radio and other communications facilities
in its Airline Operations, the Company is also subject to the Federal
Communications Act of 1934, as amended.

Labor relations in the air transport industry are generally regulated under
the Federal Railway Labor Act, as amended, which vests certain regulatory powers
in the National Mediation Board with respect to disputes between airlines and
labor unions arising under collective bargaining agreements. Airlines
certificated prior to October 24, 1978, including the Company's Airline
Operations, are also subject to regulations issued by the Department of Labor
which implements the statutory preferential hiring rights granted by the Airline
Deregulation Act of 1978 to certain airline employees who have been furloughed
or terminated.

The Company's Airline Operations are also subject to regulations of the
Department of Defense whenever flights are conducted for the military, as well
as other regulations which all U.S. corporations experience as a result of doing
business pursuant to state and federal legal requirements.

Employees
---------

At March 24, 1995, WorldCorp and World Airways employed approximately 520
persons. Airline Operations provide various employee benefits customary in the
air transportation industry. Approximately 294, or 56.5%, of the employees are
covered by collective bargaining agreements with various labor unions. The
following table presents additional information concerning Airline Operations'
labor agreements.

<TABLE>
<CAPTION>
Approximate Number Date Contract
of Active Employees Amendable
------------------- -------------
<S> <C> <C>
International Brotherhood of Teamsters
World Airways' Cockpit Crewmembers 176 June 30, 1998
World Airways' Flight Attendants 108 July 1, 1992/(a)/

Transport Workers Union
World Airways' Dispatchers 10 June 30, 1993/(a)/
</TABLE>

/(a)/ As of March 24, 1995 the contract has not been amended.

World Airways' cockpit and flight attendant crewmembers are covered by
collective bargaining agreements which expired in July 1992. On August 15,
1994, World Airways and the International Brotherhood of Teamsters ("Teamsters")
executed a four-year agreement on behalf of World Airways' cockpit members,
which was ratified on September 9, 1994. The agreement contains modifications to
the crewmember work rules which will permit World Airways to take greater
advantage of the operational capabilities of the MD-11 aircraft fleet in
exchange for crewmember pay increases.

On July 16, 1987, World Airways and the Teamsters executed a five-year
agreement on behalf of the World Airways' flight attendants, which was ratified
on August 5, 1987. The contract expired in July 1992 and since that time the
flight attendants have been employed under the terms of their prior contract
pursuant to the provisions of the Railway Labor Act. The Company is currently
in active negotiations with the Teamsters concerning renewal of the contract for
the flight attendants. In December 1994, World Airways and the Teamsters
jointly requested the assistance of a federal mediator to facilitate
negotiations between World Airways and its flight attendants. The outcome of
the negotiations cannot be determined at this time.

The agreements between World Airways and the Teamsters, on behalf of both
groups, incorporate letters of agreement which require World Airways to give
notice to the Teamsters of any acquisition or merger and would require World
Airways and any successor of World Airways, among other things, to provide
severance pay for employees furloughed within eighteen months of such
acquisition or merger when such furlough results from the merger. The
agreements also make provision for integration of seniority lists if World
Airways' operations are merged with another air carrier.

On February 21, 1990, World Airways and the Transport Workers Union executed
a three and one-half year contract on behalf of the World Airways' Dispatchers,
which was ratified on February 27, 1990. As of March 31, 1995 this contract
has not been amended.

6
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Transaction Processing

US Order designs, develops and markets transaction processing software,
interactive applications, customer support services and enabling hardware for
two industries: home banking and telephone company intelligent network
services. Home banking includes services offered by financial institutions that
allow consumers to pay bills, check account balances and receive other bank
information from their home. Telephone company intelligent network services are
new services offered by telephone companies that utilize a simple in-home
display screen incorporated into or attached to a telephoning device to deliver
textual messages to residential customers, such as Caller ID. To date, US Order
has generated limited revenues from the sale of its products and services. US
Order has entered into strategic alliances with Visa Interactive, Inc. ("Visa
Interactive") a wholly owned subsidiary of Visa International Services
Association, Inc. ("VISA"), in the financial services industry and Colonial Data
Technologies Corp. ("Colonial Data") in the telecommunications industry.

On August 1, 1994, US Order sold its electronic banking and bill pay
operations to VISA International Services Association, Inc. ("VISA") for
approximately $15.0 million in cash and a 72-month royalty stream commencing
January 1, 1995 and ending December 31, 2000. The royalty amount is based on
the number of customers who use the electronic banking and billing payment
technology sold to VISA. No assurances can be given as to the amount of the
royalty payments that will be received from VISA. US Order does not expect to
receive any significant royalty payments in 1995 (see "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Financing
Developments").

As a result of the purchase of US Order's banking operations by VISA, US
Order has agreed to certain restrictions on its operations with respect to the
banking and financial services industry. Similarly, VISA has agreed to certain
restrictions on its activities as they might relate to the ongoing businesses of
US Order. Additionally, the VISA agreement designates US Order as a "preferred
provider" to supply certain products and services including smart telephones,
consumer applications, and customer service throughout the royalty period.
Under the agreement, VISA must make its member banks aware of the preferred
provider status of US Order and its products and services, although it is under
no obligation to guarantee any minimum purchases of any such US Order products
or services by VISA or any of its members. Until August 1, 1995, VISA also
agreed not to designate any third party as a provider of US Order's services.
In January 1995, US Order signed a two-way exclusive strategic alliance with a
leading manufacturer of Caller ID units, Colonial Data Technologies, to jointly
develop and distribute US Order's next generation of smart telephones to the
telecommunications industry.

As of December 31, 1994, WorldCorp owned 52% of the voting stock of US Order.
In addition, WorldCorp exercised an option to purchase additional shares of the
voting stock of US Order for consideration equal to $3.9 million which increased
its voting ownership percentage to 89% in February 1995 (see "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Business Trends").

Competition
-----------

The market for US Order's products and services is highly competitive and
subject to rapid technological change. At present, US Order's principal
competitors in the market for smart telephones are Phillips, Northern Telecom,
and AT&T. US Order expects competition to increase in the future from existing
and new competitors and expects new competitors to include electronics
manufacturers, such as Sony and Panasonic. US Order's competition for
interactive content generally comes from device manufacturers. US Order expects
that as the installed base of smart telephones increases, it will see
competition from traditional personal computer on-line providers, such as
America On Line, Prodigy, and Compuserve, as well as from personal computer
software companies such as Microsoft, Intuit, and Novell.

Regulatory Matters
------------------

US Order's smart telephone products are subject to regulations by the Federal
Communications Commission ("FCC"). Among other requirements, US Order's smart
phones must comply with Parts 15 and 68 of the FCC's regulations.

The two markets which US Order has targeted are highly regulated. The
banking industry, although it has recently undergone significant deregulation,
remains quite restrictive at both the federal and state levels. Similarly,

7
<PAGE>

the telecommunications industry has undergone rapid change in the past decade.
Federal and state regulations are currently undergoing constant review and
revision. Interpretation, implementation, or revision of banking and
telecommunications regulations can accelerate or hinder the ultimate success of
the company and its products.

Employees
---------

At December 31, 1994, US Order had approximately 65 employees, of which
approximately 40 were full-time. Eight of those employees were engaged in
research and development, four were engaged in sales and marketing and seven
were engaged in administration and finance on a full-time equivalent basis. US
Order has no collective bargaining agreements with its employees and believes
that its relationship with its employees is good.

8
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ITEM 2. PROPERTIES
-------------------

Flight Equipment

At December 31, 1994, Airline Operations' aggregate operating fleet consisted
of eight leased aircraft as follows:
<TABLE>
<CAPTION>

Capacity Total/(b)(c)/
---------------------------- -----
Passenger/(a)/ Cargo (Tons)
--------- ------------
<S> <C> <C> <C>

McDonnell Douglas MD-11 409 -- 4
McDonnell Douglas MD-11 -- 97 1
McDonnell Douglas DC10-30 354 -- 1
McDonnell Douglas DC10-30CF 354 75 2
---
TOTAL 8
===
</TABLE>
Notes
-----

/(a)/ Based on standard operating configurations. Other configurations are
occasionally used.
/(b)/ The terms of the leases expire between 1995 and 2003.
/(c)/ Subsequent to December 31, 1994, World Airways took delivery of two
leased McDonnell Douglas DC10-30CF aircraft and one leased McDonnell
Douglas DC10-30 passenger aircraft.

Ground Facilities

WorldCorp, World Airways, and US Order lease office space located near
Washington Dulles International Airport which houses its corporate headquarters
and substantially all of the administrative employees of the airline and
transaction processing operations.

Airline Operations lease additional office and warehouse space for their
principal ground facilities in Wilmington, Delaware; Philadelphia, Pennsylvania;
Miami, Florida; Los Angeles, California; Kuala Lumpur, Malaysia; Yakota, Japan;
and Frankfurt, Germany. Additional small office and maintenance material
storage space are leased at often frequented airports to provide administrative
and maintenance support for commercial and military contracts.

ITEM 3. LEGAL PROCEEDINGS
--------------------------

For a description of the Company's current legal proceedings, see Note 19,
"Commitments and Contingencies" of the Company's Notes to Consolidated Financial
Statements in Item 8.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

No matters were submitted to a vote of security holders during 1994.

9
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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK & RELATED SECURITY HOLDER
-----------------------------------------------------------------------
MATTERS
-------

The Company's common stock is traded on the New York Stock Exchange. The
high and low closing sales prices of the Company's common stock, as reported on
the New York Stock Exchange for each quarter in the last two fiscal years, are
as follows:

<TABLE>
<CAPTION>
Common Stock
----------------------

High Low
---- ---
<S> <C> <C>

1994

Fourth Quarter $10 $6 3/8
Third Quarter 7 7/8 3 3/4
Second Quarter 5 7/8 3 5/8
First Quarter 6 5/8 5 1/2

1993

Fourth Quarter $ 7 $3 3/8
Third Quarter 6 7/8 2 3/4
Second Quarter 5 7/8 4 5/8
First Quarter 6 5/8 4 5/8

</TABLE>

In March 1992, the Company filed with the Securities and Exchange Commission
("SEC") a registration statement on Form S-3 registering $60.0 to $90.0 million
of Convertible Subordinated Debentures due 2004 (the "Debentures"). On May 26,
1992, $65.0 million of the Debentures were issued. The Debentures are
convertible into WorldCorp common stock at $11.06 per share and bear an annual
interest rate of 7%. Semi-annual interest payments are due on May 15 and
November 15.

The Company did not declare any cash dividends in 1994 or 1993 and does not
plan to do so in the foreseeable future. The Indenture governing the Company's
Debentures and 13 7/8% Subordinated Notes due 1997 in certain circumstances may
restrict the Company from paying dividends or making other distributions on its
common stock.

The approximate number of shareholders of record at March 24, 1995 is 2,714.

10
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
--------------------------------

WORLDCORP, INC. AND SUBSIDIARIES
Selected Financial Data
(in thousands except per share data)

Year Ended December 31,
-------------------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>

RESULTS OF OPERATIONS:
----------------------

Operating revenues $204,440 $202,716 $200,410 $280,292 $310,897
Operating expenses 223,149 225,524 237,265 266,863 293,632
Operating income (loss) (18,709) (22,808) (36,855)/(b)/ 13,429 17,265
Earnings (loss) from continuing
operations before income taxes,
minority interest, extraordinary
item and change in accounting
principle 10,496/(a)/ (33,697) (44,692) 7,311 (9,686)
Earnings (loss) from continuing
operations before extraordinary item
and change in accounting principle 8,308 (30,945) (42,891) 6,830 (9,911)
Extraordinary gain (loss) on acquisition
of debt, net -- -- (3,253) 3,535 6,056
Change in accounting principle -- -- (1,973) -- --
Net earnings (loss) 8,308 (30,945) (48,117) 10,365 (3,855)

Primary earnings per share:
Continuing operations $ 0.54 $ (2.12) $ (3.02) $ 0.46 $(0.76)
Gain (loss) from acquisition of debt -- -- (0.23) 0.24 0.46
Change in accounting principle -- -- (0.14) -- --
Net earnings (loss) 0.54 (2.12) (3.39) 0.70 (0.30)

Fully diluted earnings (loss) per share:
Continuing operations $ 0.53 $ * * 0.42 *
Gain (loss) from acquisition of debt -- -- -- 0.22 --
Change in accounting principle -- -- -- -- --
Net earnings (loss) 0.53 * * 0.64 *

FINANCIAL POSITION:
-------------------

Cash and short-term investments $ 8,828 $ 17,584 $ 14,769 $ 29,147 $ 30,041
Total assets 97,536 98,119 93,346 138,966 197,000
Long-term obligations including
current maturities 119,032 129,049 104,192 94,167 154,513
Common stockholders' deficit (88,193) (101,073) (76,362) (30,363) (46,635)
Dividends -- -- -- -- --

</TABLE>

* Fully diluted earnings per share are anti-dilutive.

/(a)/ Includes a $27.0 million gain on the sale of 24.9% of World Airways common
stock and a $14.5 million gain on the sale of US Order's electronic
banking and bill payment operations.
/(b)/ Includes a $31.4 million loss on the sale of Key Airlines, Incorporated.

11
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

Management's Discussion and Analysis of Financial Condition and Results of
Operations presented below relates to the operations of WorldCorp, Inc.
("WorldCorp" or "the Company") as reflected in its consolidated financial
statements. These statements primarily include the accounts of the contract
flight operations of World Airways, Inc. ("World Airways") and Key Airlines,
Incorporated ("Key Air") until October 23, 1992, when WorldCorp sold 100% of Key
Air. On February 28, 1994, pursuant to an October 1993 agreement, the Company
sold 24.9% of its ownership in World Airways to MHS Berhad ("MHS"), a Malaysian
aviation company. Effective December 31, 1994, WorldCorp repurchased 5% of World
Airways' common stock from MHS.

WorldCorp also has an ownership interest in US Order, Inc. ("US Order"), a
company which designs, develops, and markets transaction processing software,
interactive applications, customer support services, and enabling hardware for
two industries: home banking and telephone company intelligent network
services. In December 1993, US Order completed a $12.0 million private equity
placement. On August 1, 1994, US Order sold its electronic banking and bill
payment operations to VISA International Services Association, Inc. ("VISA"). As
of December 31, 1994, WorldCorp owned 52% of the voting stock of US Order. In
addition, WorldCorp exercised an option to purchase additional shares of the
voting stock of US Order for consideration equal to $3.9 million which increased
its voting ownership percentage to 89% in February 1995 (see "Business Trends").

General

WorldCorp owns majority positions in companies that operate in two distinct
business areas: air transportation (through World Airways) and transaction
processing (through US Order). MHS Berhad of Malaysia is an equity investor in
World Airways.

Air Transportation
------------------

World Airways is a contract air carrier that generally charges customers
based on a block hour basis rather than a per seat or per pound basis. A "block
hour" is defined as the elapsed time computed from the moment the aircraft moves
at its point of origin to the time it comes to rest at its destination.
Fluctuations in flight revenues are not necessarily indicative of true growth
because of shifts in the mix between full service contracts and basic contracts.
Under the terms of full service contracts, World Airways is responsible for all
costs associated with operating these contracts and receives a higher rate per
hour. Under the terms of basic contracts, World Airways provides only certain
services associated with the contract including aircraft, crews, insurance, and
maintenance ("basic contracts"). World Airways typically charges a lower rate
per hour for basic contracts since the customer is responsible for other
operating costs. For this reason, it is important to measure pure growth
through block hours flown rather than actual revenues earned. Typically, U.S.
military contracts are full service contracts where the rate paid is set
annually and consists of all flying costs, including fuel and ground handling of
the aircraft and cargo.

The Company's current fuel purchasing policy consists of the purchase of fuel
within seven days in advance of all flights based on current prices set by
individual suppliers. In addition, the Company receives certain volume
discounts. The Company purchases no fuel under long-term contracts nor does the
Company enter into futures or fuel swap contracts. The Company manages fuel
price risk by making the Company's customers responsible (in all of the
Company's contracts) for potential fuel price fluctuations in excess of five
percent.

Customers
---------

World Airways' business relies heavily on its U.S. Air Mobility Command
("AMC"), Malaysian Airline System Berhad ("MAS"), and P.T. Garuda Indonesia
("Garuda") contracts, which provided 22%, 19%, and 24%, respectively, of
consolidated revenues in 1994, and 14%, 23%, and 20%, respectively, of
total block hours in 1994. During 1993, AMC, MAS, and Garuda contracts provided
24%, 17%, and 21%, respectively, of consolidated revenues, and 19%, 16%, and
16%, respectively, of total block hours. The loss of any of these contracts or
a substantial reduction in business from any of these contracts, if not
replaced, would have a material adverse effect on the Company's revenues and
financial condition.

AMC has awarded contracts to World Airways since 1956. The minimum contract
amount for 1995 of $33.4 million is a 73% increase over 1994, and will be
augmented by further expansion business. Expansion business

12
<PAGE>

totaled 92% of the minimum contract amount for 1994 compared to 161% for 1993.
World Airways cannot determine how any future cuts in military spending may
affect future operations with AMC.

World Airways has provided service to MAS since 1981, providing aircraft for
integration into MAS' scheduled passenger and cargo operations as well as
transporting passengers for the annual Hadj pilgrimage. MHS, which owns 19.9%
of World Airways as of December 31, 1994, acquired a 32% ownership interest in
MAS from the Malaysian government during 1994. As a result of the strengthening
of the MHS/MAS relationship, World Airways recently entered into a series of
long-term contracts with MAS. World Airways has agreed to provide five aircraft
to MAS under long-term contracts with expirations ranging from March 1997 to
September 2000 (see "Financing Developments"). The current MAS Hadj contract,
which was entered into in 1992, expires in 1996. In 1994, World Airways provided
two aircraft for Hadj operations. World Airways expects to provide three
aircraft for the 1995 MAS Hadj operations.

Transaction Services
--------------------

US Order designs, develops and markets transaction processing software,
interactive applications, customer support services and enabling hardware for
two industries: home banking and telephone company intelligent network
services. Home banking includes services offered by financial institutions that
allow consumers to pay bills, check account balances and receive other bank
information from their home. Telephone company intelligent network services are
new services offered by telephone companies that utilize a simple in-home
display screen incorporated into or attached to a telephoning device to deliver
textual messages to residential customers, such as Caller ID. To date, US Order
has generated limited revenues from the sale of its products and services. US
Order has entered into strategic alliances with Visa Interactive, inc. ("Visa
Interactive") a wholly owned subsidiary of Visa International Services
Association, Inc. ("VISA"), in the financial services industry and Colonial Data
Technologies Corp. ("Colonial Data") in the telecommunications industry.

Results of Operations

1994 Compared with 1993
-----------------------

Operating Revenue
-----------------

Although operating revenues have remained relatively unchanged over the past
year, the Company continues to experience an increase in 1994 quarterly block
hours when compared to the same periods in 1993. Block hours increased 13% to
26,455 in 1994 from 23,482 in 1993. Despite the increase in block hours, World
Airways

13
<PAGE>

experienced an 11% decrease in revenue per block hour to $7,674 in 1994 from
$8,589 in 1993 (excluding revenue from guaranteed block hours). This decrease
is primarily due to the fact that block hours under full service contracts were
62% of total block hours in 1994 and 85% in 1993. In addition, guaranteed
minimum payments related to the 1994 Hadj of $0.2 million were significantly
below guaranteed minimum payments of $8.3 million in 1993.

Aircraft capacity, the number of days that the Company's aircraft are
available for service (including days in maintenance), decreased to 8.2
available aircraft per day in 1994 from 8.8 in 1993. This decrease was offset
by a 21% increase in daily aircraft utilization to 8.8 hours in 1994 from 7.3
hours in 1993. Aircraft utilization is measured by the total block hours that
the Company's aircraft were in use divided by the number of days that the
aircraft were available for service (including days in maintenance).

Operating Expenses
------------------

Maintenance costs decreased $2.5 million (9%) in 1994. This decrease resulted
primarily from a $4.2 million reversal of excess accrued maintenance reserves
associated with the expiration of three DC10-30 aircraft leases during 1994.
Excluding the effect of this reversal, maintenance expense increased $1.7
million, primarily due to a 13% increase in block hours flown in 1994.

Despite the increase in block hours flown, operating expenses decreased in
1994, generally due to the shift to more basic contracts in 1994. However, this
decrease was partially offset by increases in the following areas: rent costs
associated with the addition of higher cost MD-11 aircraft, flight operations
subcontracted to other carriers, and selling and administrative expenses.
Selling and administrative costs increased $3.7 million (18%) primarily as a
result of increased legal and professional fees and marketing efforts. In
addition, the Company granted stock options to certain executives which resulted
in compensation expense being incurred.

Transaction Services - US Order
-------------------------------

In 1994, the Company recorded $1.2 million of net income (net of $2.5 million
of minority interest) relating to US Order, compared to $9.2 million of losses
(net of $2.9 million of minority interest) in 1993. This $10.4 million increase
is due to a $10.7 million gain (net of minority interest) resulting from the
VISA transaction. To date, US Order has generated limited revenue from the sale
of its products and services.

Non-Operating Items
-------------------

Interest expense increased $1.0 million (9%) in 1994 as a result of MD-11
rotables financing and aircraft rent deferrals in 1993, and use of a bank line
of credit in 1994. In addition, WorldCorp recognized a gain of $26.9 million
from the sale of 24.9% of World Airways common stock in 1994, pursuant to an
October 1993 agreement.

1993 Compared with 1992
-----------------------

Operating Revenue
-----------------

In 1993, operating revenues increased $2.3 million (1%) to $202.7 million
primarily due to an increase in block hours flown. Block hours increased five
percent to 23,482 in 1993 from 22,263 in 1992. Due to peak airlift requirements
of World Airways' customers for the 1992 Hadj pilgrimage, certain flights were
subcontracted to other carriers which resulted in $11.5 million of revenue in
1992 with no corresponding block hours flown. This was not necessary in 1993.
This increase was partially offset by a five percent decrease in revenue per
block hour to $8,589 in 1993 from $8,996 in 1992. Block hours under full
service contracts were 85% of total block hours in 1993 and 84% in 1992.

Aircraft capacity, the number of days that the Company's aircraft are
available for service (including days in maintenance), increased to 8.8
available aircraft per day in 1993 from 7.2 in 1992. This increase was offset
by a 13% decrease in daily aircraft utilization to 7.3 hours from 8.4 hours.
Aircraft utilization is measured by the total block hours that the Company's
aircraft were in use divided by the number of days that the aircraft were
available for service (including days in maintenance). Included in other
revenues in 1992 is $4.1 million related to settlements of contract claims from
AMC.

14
<PAGE>

Operating Expenses
------------------

Flight costs increased $10.6 million (20%) due to costs associated with the
integration of MD-11 aircraft (see "Capital Plans"). The Company maintained the
maximum number of crews available during the first six months of 1993 in order
to support intensive crewmember training for the MD-11 aircraft while
maintaining the previous year's level of flight operations. This resulted in
higher crew costs than normal given the low level of utilization during the
first quarter of 1993.

Maintenance costs decreased by $5.8 million (17%) due to lower maintenance
costs for new MD-11 aircraft and lower engine overhaul repair expense for the
DC10-30 fleet. Maintenance cost per block hour was $1,222 in 1993 compared with
$1,548 in 1992. The reduced maintenance costs are due, in part, to guarantees
and warranties received from the engine and aircraft manufacturers of the MD-11
aircraft. Because the MD-11 is a relatively new aircraft, cost experience on
the maintenance of the aircraft is unavailable. Therefore, the Company is, in
part, relying on manufacturers' guidelines to estimate future maintenance costs
on the MD-11 aircraft.

Aircraft costs increased by $17.1 million (49%) in 1993. This increase was
primarily due to a $20.5 million increase in rent cost associated with the
delivery of four MD-11 aircraft during March and April 1993. In July 1993, two
DC10-30 aircraft were returned to their lessors, resulting in a $1.5 million
early termination payment of which $1.1 million was expensed in 1993. Partially
offsetting these increases was a reduction of $5.4 million in rent costs
associated with the return of the two DC10 aircraft and short-term aircraft
leases not required in 1993.

Flight operations subcontracted to other carriers decreased by $10.3 million
(89%). In 1992, World Airways subcontracted a portion of its AMC contract award
in order to redeploy one of its aircraft for commercial passenger flying. This
was not necessary in 1993.

Selling and administrative costs increased $2.2 million (12%) primarily as a
result of a $0.9 million settlement associated with the return of a DC10-30
aircraft, increased legal fees, and the formation of World Flight Crew Services,
a new subsidiary of WorldCorp.

Loss on Sale of Key Airlines
----------------------------

On October 23, 1992, WorldCorp sold 100% of the outstanding common stock of
KeyAir. Loss on sale of KeyAir in 1993 primarily consists of the write-off of a
$0.3 million uncollateralized line of credit and $0.3 million drawdown of a
letter of credit. Loss on the sale of Key Air in 1992 consists principally of
the non-cash write-down of the B727 aircraft and related rotables to estimated
net realizable values and the write-off of the remaining goodwill associated
with the purchase of Key Air in 1987.

Transaction Processing-US Order
-------------------------------

On July 1, 1992, the Company purchased an incremental 6% of the preferred
stock of US Order for $1.0 million which increased the Company's ownership in US
Order to 51%. Accordingly, US Order's results of operations are consolidated in
the accompanying financial statements beginning on July 1, 1992. In December
1993, US Order completed a $12.0 million private equity placement. Following
this transaction, WorldCorp owned 46% of the voting stock of US Order.
WorldCorp had an option through December 15, 1994 to purchase additional shares
of the voting stock of US Order for consideration equal to $5.0 million, which
would increase its ownership of the voting stock to 79%. The accompanying
statements of operations include 59% of the results of operations of US Order
beginning December 1993. This 59% is based on liquidation preferences. In
1993, the Company recorded $9.2 million of losses (net of minority interest)
relating to US Order, compared to $2.4 million of losses in 1992. This $6.8
million increase resulted primarily from an increase in overhead costs
associated with expanded research and development and the writedown of an older
generation of terminal components.

Non-Operating Items
-------------------

Interest income decreased as a result of lower investment balances and lower
interest rates in 1993. Interest expense decreased $0.1 million in 1993 as a
result of partially replacing the 13 7/8% Subordinated Notes ("the Notes") with
the 7% convertible debentures (the "Debentures") and lower debt balances.
Offsetting these decreases was interest associated with MD-11 rotables
financing, aircraft rent deferrals, and a bank line of credit.

15
<PAGE>

Liquidity and Capital Resources

The Company's air transportation subsidiary operates in a very challenging
business environment. In recent years, the combination of a generally weak
economy and the depressed state of the airline industry has adversely affected
the Company's operating performance. Although there has been recent growth in
demand within the industry, such that World Airways experienced a 13% increase
in block hours flown in 1994 over 1993, yields generally remain low.

The Company is highly leveraged, primarily due to losses sustained by World
Airways' scheduled operations between 1979 and 1986, debt restructurings in 1984
and 1987, and losses the Company incurred in the past several years. In
addition, the Company incurred substantial debt and operating lease committments
during 1993 in connection with acquiring MD-11 aircraft and related spare parts.
The Company has historically financed its working capital and capital
expenditure requirements out of cash flow from operating activities, secured
borrowings, and other financings from banks and other lenders.

US Order has generated operating losses since its inception. US Order's
interactive products and services are subject to the risks inherent in the
marketing and development of new products. The market for US Order's products
and services is relatively new and is characterized by rapid technological
change, evolving industry standards, changes in end-user requirements and
frequent new product introductions and enhancements. To date, US Order has
generated limited revenues through the sale of its products and services,
although in 1994, a substantial gain was generated on the sale of certain
operations to VISA, and future revenue and cash flow are likely to be generated
by the 72-month revenue stream from VISA.

Cash Flows from Operating Activities
------------------------------------

During 1994, operating activities used $29.1 million compared to $8.6 million
in the prior year. This increase in cash used was primarily due to operating
losses incurred in 1994, MD-11 aircraft security deposits, and fluctuations in
the level of accounts payable since 1992. In addition, the Company deferred
certain aircraft rental payments in 1993. No such deferrals occurred in 1994.

Cash Flows from Investing Activities
------------------------------------

Cash flows from investing activities provided $13.3 million in 1993 as
compared to using $14.6 million in 1993. In 1994, the Company purchased spare
parts for one MD-11 aircraft integrated into the fleet in April. In 1993, the
Company purchased spare parts for four MD-11 aircraft integrated into the fleet
in March and April. In addition, US Order sold its banking operations to VISA
for $14.7 million (net of related expenses) in 1994.

Cash Flows from Financing Activities
------------------------------------

In 1994, financing activities provided $7.1 million compared to $26.4 million
in the prior year. In 1994, pursuant to an October 1993 agreement, the Company
sold 24.9% of World Airways to MHS for $24.7 million in cash. In addition, US
Order repurchased $2.7 million of preferred stock. The Company made $16.2
million of net repayments for debt and a revolving bank line of credit in 1994
versus acquiring $18.5 million of additional debt and a bank line of credit in
1993. Finally, the Company received $1.4 million from stock transactions in 1994
versus $4.9 million in 1993.

Capital Plans
-------------

In October 1992 and January 1993, World Airways signed a series of agreements
to lease seven new MD-11 aircraft for initial lease terms of two to five years.
As of March 31, 1995, World Airways has taken delivery of four passenger MD-11
aircraft, one freighter MD-11, and two convertible MD-11s. As part of the lease
agreements, World Airways was assigned purchase options for four additional MD-
11 aircraft. In 1992, World Airways made non-refundable deposits toward four of
the option aircraft. During 1995, the options' exercise dates were extended to
May 31, 1995, with scheduled aircraft delivery dates beginning no earlier than
1996. If the options are exercised, World Airways intends to obtain financing
for the purchases. World Airways plans to exit DC10 aircraft and ultimately
standardize its fleet around the MD-11 aircraft. World Airways, however, has
recently entered into two short-term DC10 aircraft leases with lease terms
expiring June 1995 and August 1995, and one DC10 aircraft lease

16
<PAGE>

expiring in September 1997. World Airways may choose to lease additional DC10
aircraft to meet short-term peak demand requirements.

World Airways made $6.7 million of capital expenditures and cash deposits for
MD-11 integration in 1994. World Airways estimates that its required capital
expenditures for MD-11 integration will be approximately $9.8 million in 1995.
In addition, World Airways will require approximately $8.0 million to purchase a
spare engine in the fourth quarter of 1995. While World Airways is currently
seeking financing for the purchase of the engine and additional spare parts
relating to the MD-11 aircraft recently acquired, no assurances can be given
that the Company will obtain the necessary financing.

World Airways has obtained regulatory approval from the government of Israel
to operate a scheduled service commencing in July 1995. World Airways
anticipates working capital requirements of approximately $2.0 million in
connection with the start of scheduled service.

US Order's working capital and capital expenditure requirements for the next
twelve months are expected to be approximately $4.0 million. On August 1, 1994,
US Order sold its electronic banking and bill payment operations to VISA for
$15.0 million plus certain future payments. As of December 31, 1994,
approximately $2.5 million of these proceeds are available to fund future
working capital requirements of US Order. US Order is currently seeking
additional equity financing as well as attempting to sell certain of its assets,
including its $2.5 million advertising credit. However, there can be no
assurance that such financing will be obtained.

In 1995, WorldCorp has parent company repayment obligations totaling $16.5
million, consisting primarily of an $8.5 million (excluding interest thereon)
note payable to MHS due in December 1995 and approximately $8.1 million of
annual debt service on subordinated notes and debentures. WorldCorp intends to
satisfy these obligations by one or more of the following: intercompany loans,
further sales of equity securities of its subsidiaries, and/or external
financing.

On August 25, 1994, the Company's Board of Directors approved the exercise of
WorldCorp's option to purchase 4.8 million shares of US Order common stock held
by its founders (the "Founders"). Under the terms of this agreement, WorldCorp
would pay $3.9 million in consideration as follows: $2.1 million in shares of
WorldCorp common stock and $1.8 million in cash. Prior to year-end, WorldCorp
paid $0.4 million in cash to the Founders in exchange for 498,794 shares of US
Order common stock, increasing WorldCorp's ownership of voting stock to 52%.
Effective February 16, 1995, WorldCorp purchased the remaining 4.3 million
shares of US Order common stock with 302,282 shares of WorldCorp common stock,
$0.3 million in cash, and $1.1 million in the form of notes due to the Founders.
These notes are due in 1995. As a result of this option exercise, WorldCorp
increased its ownership of US Order's voting stock to 89% in February 1995.

As of March 31, 1995, WorldCorp has invested $14.2 million of equity (net of
$3.3 million received from the retirement of a portion of US Order preferred
stock - see "Financing Developments") and $3.5 million of unsecured debt in US
Order. WorldCorp does not plan to provide additional financing to US Order in
1995.

As of December 31, 1994, the Company holds approximately $14.1 million (at
book value) of aircraft spare parts and transaction processing terminals
currently available for sale.

Financing Developments
----------------------

The Company has closed certain transactions which, in aggregate, have
provided additional cash to WorldCorp, World Airways, and US Order.

First, on October 30, 1993, WorldCorp, World Airways, and MHS entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which MHS,
subject to satisfactory completion of its due diligence investigations, agreed
to purchase 24.9% of World Airways' common stock for $27.4 million in cash. On
February 28, 1994, WorldCorp, World Airways, and MHS concluded this transaction.
World Airways received upon closing (the "Closing") $12.4 million to fund its
working capital requirements. The remaining $15.0 million (less a $2.7 million
deposit received in November 1993) was paid to WorldCorp to add to its cash
reserves. At the time of the signing of the Stock Purchase Agreement, World
Airways was a wholly-owned subsidiary of WorldCorp. As a result of this
transaction, WorldCorp recognized a gain of approximately $26.9 million in the
first quarter of 1994.

17
<PAGE>

Effective December 31, 1994, WorldCorp agreed to pay MHS $8.5 million in
exchange for the repurchase of 5% of World Airways' common stock from MHS and
the execution of a series of long-term contracts between World Airways and MAS.
The $8.5 million note to MHS is due in December 1995.

Second, in 1993, World Airways closed an agreement with a financial
institution for a $20.0 million credit facility collateralized by certain
receivables and spare parts. This agreement contains certain covenants related
to World Airways' financial condition and operating results. Approximately $10.8
million of the proceeds from this transaction were used to retire existing
obligations. The balance was added to cash reserves. As of December 31, 1994,
$2.8 million of the $8.0 million portion of the credit facility collateralized
by receivables was utilized, with no borrowing capacity currently available.
World Airways was not in compliance with its debt covenants at the end of the
fourth quarter, but has obtained a waiver of these covenants from the financial
institution. In 1995, World Airways amended this agreement to adjust certain
covenants beginning in the first quarter of 1995 and extended the credit
facility's term to 1998. No assurances can be given that the Company will meet
these revised covenants or, if required, obtain the required waivers. In
addition, the amended agreement provides for up to an additional $2.0 million in
borrowing capacity, subject to spare part valuations, beginning in October 1995.

Third, on August 1, 1994, US Order sold its electronic banking and bill
payment operations to VISA for $15.0 million, assumption of certain liabilities,
and a 72 month royalty stream commencing January 1, 1995 and ending December 31,
2000 (the "Royalty Period"). Of the proceeds received by US Order, $9.4 million
was used to retire a portion of its preferred stock (of which WorldCorp received
$3.3 million) and vested employee options. As of December 31, 1994,
approximately $2.5 million of these proceeds is available to fund future working
capital requirements of US Order. The royalty amount is based on the number of
VISA customers using the electronic banking and bill payment technology sold by
US Order to VISA. The first $75,000 of royalties earned during each quarter on
a cumulative basis for a total of ten quarters, will be applied by VISA to
offset certain liabilities assumed by VISA pursuant to the acquisition. To
date, VISA has commitments from more than 40 U.S.-based financial institutions
(including six of the nation's top 20 banks) to offer the VISA bill pay system.
No assurances can be given as to the amount of the royalty payments that will be
received from VISA. US Order does not expect to receive any significant royalty
payments in 1995.

Fourth, World Airways has concluded a series of contracts with MAS and other
commercial customers which have resulted in substantial increases in its backlog
of business to approximately $475 million today from approximately $80 million a
year ago. Under the terms of its new long-term contracts with MAS, World
Airways will operate three freighter aircraft for at least 400 hours per
aircraft per month (or a total of at least 1,200 hours per month). One
freighter is currently in service and will operate through September 1999; two
additional freighters will begin service in June 1995 and operate through
September 2000. These contracts provide for hourly rates that reflect generally
improved market conditions. Also under the new contracts, MAS has extended
through March 1997 the operation of two MD-11 passenger aircraft that had been
previously contracted by MAS to operate from October 1994 through March 1995.
Each aircraft will operate a minimum of 320 hours per month (or a total minimum
of 640 hours per month) at rates that reflect generally improved market
conditions.

In the first quarter of 1995, World Airways received approximately $6.0
million in working capital and short-term financing. This financing bears
interest at approximately 11%. Approximately $5.2 million of this financing is
due in the second quarter of 1995. The remaining balance will be repaid in
monthly installments through December 1995.

The company believes that the combination of the financings consummated to
date and the operating and additional financing plans described above will be
sufficient to allow the Company to meet its operating and capital requirements
in 1995.

Business Trends

The Company's air transportation business is highly seasonal. Typically,
World Airways experiences reduced demand during the first quarter for passenger
and cargo services relative to other times of the year. World Airways generally
experiences stronger results in the second and third quarters due to demand for
commercial passenger services including the annual Hadj pilgrimage. Fourth
quarter results depend upon the overall world economic climate and global trade
patterns. In recent years, soft demand and weakening yields have adversely
affected worldwide cargo and passenger markets.

18
<PAGE>

As a result of its marketing alliance with MAS and increased marketing
efforts, World Airways entered into several important contracts in 1994. World
Airways recently concluded a series of contracts with MAS that will result in
World Airways' operation of two passenger aircraft until 1997, one freighter
aircraft until 1999, and two freighter aircraft until 2000 (see "Financing
Developments"). These contracts and related rate improvements, along with
recent agreements with other commercial customers, have absorbed a substantial
portion of the Company's aircraft capacity in 1995 and 1996 and resulted in
substantial increases in the Company's backlog of business to approximately $475
million today from approximately $80 million a year ago. Approximately 90% of
the $475 million backlog represents contracts in place with MAS, which is 32%
owned by MHS, a 19.9% shareholder of World Airways. As a result of these
contracts, World Airways expects that the percentage of the Company's total
revenue generated from MAS in 1995 will increase significantly over historical
levels. In addition, World Airways has obtained regulatory approval from the
Government of Israel to operate a scheduled service between New York and Tel
Aviv commencing in July 1995.

In order to make World Airways more cost-competitive with certain passenger
and cargo carriers, and to improve cash flow, World Airways' management has
taken a series of steps to reduce operating costs. These steps generally
involve eliminating business activities that are not essential to World Airways'
operations, including eliminating those costs which customers are not prepared
to compensate for in the form of higher prices. World Airways' management
believes that these actions, which began in the second half of 1994, should
result in improved operating income and cash flow. Management also believes
that the shift in the Company's business to more patterned flying, made possible
by the long-term contracts it has obtained, should also enable the Company to
achieve certain operating cost efficiencies.

US Order's research indicated that consumers prefer to receive banking
services through their local bank. The VISA transaction in August 1994 postures
the company to deliver its products and services to 13,000 VISA member banks in
the United States. The Company believes that the VISA transaction improves the
prospects of US Order's future performance by expanding the business
opportunities available to US Order through customization services, smart
telephones, non-financial applications, customer service, and facilities
management.

On August 25, 1994, the Company's Board of Directors approved the exercise of
WorldCorp's option to purchase 4.8 million shares of US Order common stock held
by its founders. Under the terms of this agreement, WorldCorp would pay $3.9
million, consisting of $2.1 million in shares of WorldCorp common stock and $1.8
million in cash. Prior to year-end, WorldCorp paid $0.4 million in cash to the
founders in exchange for 498,794 shares of US Order common stock, increasing
WorldCorp's ownership of voting stock to 52%. Effective February 16, 1995,
WorldCorp purchased the remaining 4.3 million shares of US Order common stock
with 302,282 shares of WorldCorp common stock, $0.3 million in cash, and $1.1
million in the form of notes due to the founders. These notes are due in 1995.
As a result of this option exercise, WorldCorp increased its ownership in US
Order's voting stock to approximately 89% in February 1995.

Other Matters

On August 11, 1992, WorldCorp, World Airways, and certain other commercial
paper customers of Washington Bancorporation ("WBC") were served with a
complaint by WBC as debtor-in-possession by and through the Committee of
Unsecured Creditors of WBC (the "Committee"). The complaint arises from
investment proceeds totaling $6.8 million received by WorldCorp and World
Airways from WBC in May 1990 in connection with the maturity of WBC commercial
paper. The Committee seeks to recover this amount on the grounds that these
payments constituted voidable preferences and/or fraudulent conveyances under
the Federal Bankruptcy Code and under applicable state law. On June 9, 1993,
the Company filed a motion to dismiss this litigation and intends to vigorously
contest the claim. No assurances can be given of the eventual outcome of this
litigation.

19
<PAGE>

WorldCorp has never paid any cash dividends and does not plan to do so in the
foreseeable future. Both the 13 7/8% Subordinated Notes Indenture and the
indenture pursuant to which the Debentures were issued (the "Indentures")
restrict the Company's ability to pay dividends or make other distributions on
its common stock. In addition, the Indentures originally restricted the ability
of World Airways to pay dividends other than to the Company. In 1994, however,
the Company received approval from the holders of the Indentures to allow World
Airways to pay dividends to parties other than the Company.

The $20 million credit facility also contains restrictions on World Airways'
ability to pay dividends. Under this agreement, World Airways cannot declare,
pay, or make any dividend or distribution in excess of the lesser of $4.5
million or 50% of net income for the previous nine months. In addition, World
Airways must have a cash balance of at least $7.5 million immediately after
giving effect to such dividend.

All of the funds from operations are generated by the Company's subsidiaries.
The ability of the Company and its subsidiaries to pay principal and interest on
their respective short and long-term obligations is substantially dependent upon
the payment to the Company of dividends, interest or other charges by its
subsidiaries and upon funds generated by the operations of the subsidiaries.

The availability of net operating loss, investment tax credit, and
alternative minimum tax credit carryforwards to reduce the Company's future
Federal income tax liability is subject to limitations under the Internal
Revenue Code of 1986, as amended (the "Code"). Generally, these limitations
restrict the availability of net operating loss and investment tax credit
carryforwards upon certain changes in stock ownership by five percent
shareholders which, in aggregate, exceed 50 percentage points in value in the
three-year testing period ("Ownership Change"). In August 1991, 5.7 million
shares of common stock were sold by a group of existing shareholders. This
transaction constituted an Ownership Change, which reduced the annual
utilization of net operating loss, alternative minimum tax credit, and
investment tax credit carryforwards ("Carryforwards") available to the Company
in 1991 and future years. As of December 31, 1994, the Company had net
operating loss carryforwards for federal income tax purposes of $72.6 million
[subject to a $6.3 million annual limitation based on the value of the
outstanding Common Stock immediately prior to the Ownership Change and the
statutorily provided long-term tax exempt rate (the "Limitation")] and $89.9
million (generated after the Ownership Change) which are available to offset
future federal taxable income. These carryforwards expire between 1997 and
2009. As a result of the transactions between the Company and MHS during 1994
(see Note 4), approximately $113.5 million of the consolidated net operating
loss carryforwards for federal income tax purposes (subject to the Limitation)
will be allocated to World Airways, and therefore, will only be available to
offset future federal taxable income of World Airways.

20
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

WORLDCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
<TABLE>
<CAPTION>

December 31,
-------------------
1994 1993
------- -------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents, including $107
restricted cash in 1994 and $3,171 in 1993 (Note 19) $ 8,160 $16,916

Restricted short-term investments (Notes 7 and 19) 668 668

Trade accounts receivable, less allowance for doubtful
accounts of $81 in 1994 and $311 in 1993 (Note 11) 5,748 8,476

Other receivables 3,134 5,109

Prepaid expenses and other current assets (Notes 8 and 18) 8,222 3,476

Assets held for sale (Notes 5 and 9) 2,500 6,000
------- -------

Total current assets 28,432 40,645
------- -------

ASSETS HELD FOR SALE (Notes 5 and 9) 11,645 8,660

EQUIPMENT AND PROPERTY (Note 12)
Flight and other equipment 27,698 35,547
Equipment under capital leases 12,006 13,675
------- -------
39,704 49,222
Less accumulated depreciation and amortization 12,657 16,171
------- -------

Net equipment and property 27,047 33,051
------- -------

LONG-TERM OPERATING DEPOSITS (Note 12) 13,562 10,028

OTHER ASSETS AND DEFERRED CHARGES (Notes 4 and 8) 9,689 5,735

INTANGIBLE ASSETS (Note 10) 7,161 --
------- -------

TOTAL ASSETS $97,536 $98,119
======= =======
</TABLE>
(Continued)

21
<PAGE>

WORLDCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
(in thousands except share data)
(Continued)
<TABLE>
<CAPTION>
December 31,
-------------------------
1994 1993
----------- ------------
<S> <C> <C>
CURRENT LIABILITIES
Notes payable (Note 11) $ 15,662 $ 7,069
Current maturities of long-term obligations (Note 12) 9,664 10,448
Deferred aircraft rent (Note 12) 907 6,295
Accounts payable 12,311 12,064
Unearned revenue 5,615 4,456
Accrued maintenance in excess of reserves paid 6,395 14,732
Accrued salaries and wages (Note 18) 7,652 7,252
Accrued interest 2,297 2,224
Accrued taxes 1,855 955
--------- ---------
Total current liabilities 62,358 65,495
--------- ---------

LONG-TERM OBLIGATIONS, NET (Note 12)
Subordinated convertible debt 65,000 65,000
Subordinated notes, net 24,942 24,926
Deferred aircraft rent, net of current portion 1,522 1,850
Equipment financing and other long-term obligations 17,904 26,825
--------- ---------
Total long-term obligations, net 109,368 118,601
--------- ---------

OTHER LIABILITIES
Deferred gain from sale leaseback transactions, net of
accumulated amortization of $32,344 in 1994 and
$30,395 in 1993 8,373 10,322
Accrued postretirement benefits (Note 15) 2,384 2,250
Accrued maintenance in excess of reserves paid 2,866 2,080
Other 380 444
--------- ---------
Total other liabilities 14,003 15,096
--------- ---------

TOTAL LIABILITIES 185,729 199,192
--------- ---------

MINORITY INTEREST (Notes 3 and 4) -- --

COMMON STOCKHOLDERS' DEFICIT (Notes 3, 12, 13, 14, and 18)
Common stock, $1 par value, (60,000,000 shares authorized,
15,491,699 shares issued and 15,429,114 shares outstanding
at December 31, 1994 and 15,224,076 shares issued and
15,161,491 shares outstanding at December 31, 1993) 15,492 15,224
Additional paid-in capital 37,563 34,071
Deferred compensation (1,102) --
Accumulated deficit (139,806) (148,114)
ESOP guaranteed bank loan (Notes 12 and 15) -- (1,914)
Treasury stock, at cost (340) (340)
--------- ---------

TOTAL COMMON STOCKHOLDERS' DEFICIT (88,193) (101,073)
--------- ---------

COMMITMENTS AND CONTINGENCIES (Notes 2, 12, 15, 17, and 19)

TOTAL LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT $ 97,536 $ 98,119
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements

22
<PAGE>

WORLDCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share data)
<TABLE>
<CAPTION>
December 31,
---------------------------------
OPERATING REVENUES 1994 1993 1992
----------- --------- ---------
<S> <C> <C> <C>
Contract flight operations (Note 17) $196,218 $199,276 $183,705
Flight operations subcontracted to other
carriers 5,378 1,221 11,499
Other 1,412 1,314 5,170
Transaction processing - US Order 1,432 905 36
-------- -------- --------
Total operating revenues 204,440 202,716 200,410
-------- -------- --------
OPERATING EXPENSES
Flight 65,372 62,880 52,302
Maintenance 26,212 28,667 34,458
Aircraft costs 53,860 52,187 35,135
Fuel 31,628 40,697 37,811
Flight operations subcontracted to other
carriers 5,549 1,312 11,612
Depreciation and amortization 5,212 6,275 5,872
Selling and administrative 24,635 20,932 18,725
Loss from operation of Key Airlines (Note
5) -- -- 6,041
Loss on sale of Key Airlines (Note 5) -- 833 31,416
Transaction processing - US Order 10,681 11,741 3,893
-------- -------- --------
Total operating expenses 223,149 225,524 237,265
-------- -------- --------

OPERATING LOSS (18,709) (22,808) (36,855)
-------- -------- --------

OTHER INCOME (EXPENSE)
Interest expense (Notes 11 and 12) (12,154) (11,179) (11,243)
Interest income (Note 7) 863 730 3,996
Gain (loss) on investments, net (308) 5 126
Gain on sale of US Order banking
operations (Note 3) 14,547 -- --
Gain on sale of World Airways, Inc. stock
(Note 4) 26,922 -- --
Other, net (665) (445) (716)
-------- -------- --------
Total other income (expense) 29,205 (10,889) (7,837)
-------- -------- --------

EARNINGS (LOSS) BEFORE INCOME TAXES,
MINORITY INTEREST, EXTRAORDINARY ITEM
AND CHANGE IN ACCOUNTING PRINCIPLE 10,496 (33,697) (44,692)

INCOME TAX EXPENSE (Note 16) 159 117 28

MINORITY INTEREST (Notes 3 and 4) (2,029) 2,869 1,829
-------- -------- --------

EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM
AND CHANGE IN ACCOUNTING PRINCIPLE 8,308 (30,945) (42,891)

EXTRAORDINARY ITEM
Loss on acquisition of debt (Note 12) -- -- (3,253)
-------- -------- --------

EARNINGS (LOSS) BEFORE CHANGE IN
ACCOUNTING PRINCIPLE 8,308 (30,945) (46,144)

CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
Accumulated benefit obligation of
postretirement benefits (Note 15) -- -- (1,973)
-------- -------- --------

NET EARNINGS (LOSS) $ 8,308 $(30,945) $(48,117)
======== ======== ========
</TABLE>
(Continued)

23
<PAGE>

WORLDCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Continued)

December 31,
----------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>

EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE

Primary:

Earnings (loss) before
extraordinary item
and change in accounting
principle $0.54 $(2.12) $(3.02)

Extraordinary item -- -- (0.23)

Cumulative effect of change in
accounting principle -- -- (0.14)
---------- --------- ---------

Net earnings (loss) $0.54 $(2.12) $(3.39)
========== ========= =========

Fully diluted:

Earnings (loss) before
extraordinary item
and change in accounting
principle $0.53 $ * $ *

Extraordinary item -- -- *

Cumulative effect of change in
accounting principle -- -- *
---------- --------- ---------

Net earnings (loss) $0.53 $ * $ *
========== ========= =========

WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING

Primary 15,516,063 14,590,265 14,175,065
========== ========== ===========
Fully diluted 15,793,046 14,590,265 14,175,065
========== ========== ===========
</TABLE>

* Fully diluted earnings per share are anti-dilutive.

See accompanying Notes to Consolidated Financial Statements

24
<PAGE>

WORLDCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN COMMON STOCKHOLDERS' DEFICIT
Years ended December 31, 1994, 1993, and 1992
(in thousands except share data)
<TABLE>
<CAPTION>

Employee
Stock Owner- Total
Additional ship Plan Treasury Common
Common Paid-in Deferred Accumulated Guaranteed Stock, Stockholders'
Stock Capital Compensation Deficit Bank Loan at cost Deficit
-------- ---------- ------------- ------------ ------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>

BALANCE AT
DECEMBER 31, 1991 $14,010 $27,719 $ -- $ (69,052) $(2,700) $(340) $ (30,363)

Exercise of 251,591 options
and warrants 251 1,246 -- -- -- -- 1,497
Employee Stock Ownership Plan
guaranteed bank loan -- -- -- -- 426 -- 426
Other -- 195 -- -- -- -- 195
Net loss -- -- -- (48,117) -- -- (48,117)
-------- ------- ------------ ----------- ------------ -------- ---------

BALANCE AT
DECEMBER 31, 1992 $14,261 $29,160 $ -- $(117,169) $(2,274) $(340) $ (76,362)

Exercise of 954,875 options
and warrants 963 3,921 -- -- -- -- 4,884
Employee Stock Ownership Plan
guaranteed bank loan -- -- -- -- 360 -- 360
Sale of equity by US Order -- 847 -- -- -- -- 847
Other -- 143 -- -- -- -- 143
Net loss -- -- -- (30,945) -- -- (30,945)
-------- ------- ------------ ----------- ------------ -------- ---------

BALANCE AT
DECEMBER 31, 1993 $15,224 $34,071 $ -- $(148,114) $(1,914) $(340) $(101,073)

Exercise of 266,723 options
and warrants 268 1,160 -- -- -- -- 1,428
Employee Stock Ownership Plan
guaranteed bank loan -- -- -- -- 1,914 -- 1,914
Grant of stock options -- 2,217 (2,217) -- -- -- --
Amortization of deferred
compensation -- -- 1,115 -- -- -- 1,115
Other -- 115 -- -- -- -- 115
Net earnings -- -- -- 8,308 -- -- 8,308
-------- ------- ------------ ----------- ------------ -------- ---------

BALANCE AT
DECEMBER 31, 1994 $15,492 $37,563 $(1,102) $(139,806) $ 0 $(340) $ (88,193)
======== ======= ============ =========== ============ ======== =========

</TABLE>
See accompanying Notes to Consolidated Financial Statements

25
<PAGE>

WORLDCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
December 31,
-----------------------------------
1994 1993 1992
------------ --------- ----------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR (See Note 6) $ 16,916 $ 13,759 $ 22,841

CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) 8,308 (30,945) (48,117)
Adjustments to reconcile net earnings
(loss) to cash
provided (used) by operating activities:
Depreciation and amortization 5,212 6,275 9,205
Deferred gain recognition (1,949) (4,587) (4,558)
Deferred aircraft rent payments, net -- 8,145 --
Gain on sale of US Order banking
operations (14,547) -- --
Gain on sale of World Airways stock (26,922) -- --
Loss on sale of Key Airlines -- -- 31,416
Extraordinary item -- -- 3,253
Loss on investments 102 -- 1,161
Minority interest in earnings (loss) of
subsidiaries 2,029 (2,869) (1,829)
Cumulative effect of change in
accounting principal -- -- 1,973
(Gain) loss on sale of equipment and
property 669 (154) 160
Writedown of assets held for sale -- 1,778 --
Other (1,775) 1,446 --
Changes in certain assets and
liabilities net of
effects of non-cash transactions:
Decrease (increase) in accounts
receivable 5,230 2,802 (2,630)
Increase in deposits, prepaid
expenses and other assets (9,461) (2,113) (5,481)
(Decrease) increase in accounts
payable, accrued
expenses and other liabilities 4,001 11,605 (2,087)
-------- -------- --------
Net cash used by operating activities (29,103) (8,617) (17,534)
-------- -------- --------

CASH FLOWS FROM INVESTING ACTIVITIES
Additions to equipment and property (4,854) (23,402) (8,551)
Proceeds from disposal of equipment and
property 3,893 5,425 1,721
Purchase of investments (6,533) (210) (250)
Proceeds from sale of US Order banking
operations 14,750 -- --
Increase in equity investment in US Order -- -- (1,800)
Loan to US Order prior to purchase of
majority interest -- -- (1,250)
Purchase of majority interest in US Order -- -- 28
Proceeds from sales of short-term
investments, net 6,029 3,552 7,428
Other -- -- (1,771)
-------- -------- --------
Net cash provided (used) by investing
activities 13,285 (14,635) (4,445)
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in line of credit
borrowing arrangement, net (4,275) 7,069 --
Issuance of debt 6,087 34,936 72,178
Repayment of debt (18,065) (23,419) (10,325)
Redemption and open market acquisitions of
debt -- -- (50,453)
Payment for redemption of preferred stock
of subsidiary (2,718) -- --
Proceeds from stock transactions 1,428 4,884 1,497
Proceeds from sale of equity by subsidiary 12,488 800 --
Proceeds from sale of subsidiary's stock 12,300 2,700 --
Debt issuance costs -- (561) --
Other (183) -- --
-------- -------- --------
Net cash provided by financing activities 7,062 26,409 12,897
-------- -------- --------

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (8,756) 3,157 (9,082)
-------- -------- --------

CASH AND CASH EQUIVALENTS AT END
OF YEAR (See Note 6) $ 8,160 $ 16,916 $ 13,759
======== ======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements

26
<PAGE>

WORLDCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

A. Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
WorldCorp, Inc. ("WorldCorp" or the "Company"), its wholly-owned subsidiaries:
World Airways, Inc. ("World Airways"); Key Airlines, Incorporated ("KeyAir")
(see Note 5); WorldCorp Leasing, Inc.; WorldCorp Leasing II, Inc.; WorldCorp
Services, Inc.; World Airways Cargo, Inc.; WorldCorp Investments, Inc.; World
Flight Crew Services, Inc.; and a 52% ownership interest in the voting stock in
US Order, Inc. ("US Order") (see Note 4). All significant intercompany balances
have been eliminated.

B. Financial Statement Reclassifications
Certain items in prior year financial statements included herein have been
reclassified to conform to 1994 financial statement presentation.

C. Cash Equivalents
For purposes of the Statements of Cash Flows, the Company considers all
highly liquid investments purchased with an original maturity of ninety days or
less to be cash equivalents.

D. Revenue Recognition
Contract flight operations and transaction processing revenues are recognized
as the services are provided.

E. Earnings (Loss) Per Common Share
Primary earnings (loss) per common share have been computed by dividing
earnings (loss) by the weighted average number of common and common equivalent
shares outstanding. Common equivalent shares include warrants and options.
Fully diluted earnings per common and common equivalent shares, including
convertible debt, have not been presented where the results are anti-dilutive.

F. Investments
Short-term investments are carried at the lower of aggregate cost or market
value.

G. Equipment and Property
Equipment and property are stated at cost or, if acquired under capital
leases, at the present value of the minimum lease payments. Engine overhauls
and major airframe maintenance and repairs are charged to operating expense on
an accrual basis. Modifications performed in response to Airworthiness
Directives issued by the Federal Aviation Administration are capitalized at
cost.

Provisions for depreciation and amortization of equipment and property are
computed over estimated useful lives or the term of the lease, if shorter, for
capital leases, by the straight-line method, with estimated residual values of
0 - 15%. Estimated useful lives of equipment and property are as follows:

DC10 and MD-11 flight equipment 15-16 years
Other equipment and property 5-10 years

Deferred gains realized in connection with sale-leasebacks of aircraft and
equipment are amortized over the periods of the respective leases.

H. Assets Held for Sale
Assets held for sale are recorded at the lower of cost or estimated net
realizable value.

I. Intangible Assets
The excess of cost over the estimated fair value of the Company's share of
its subsidiaries' net assets at the date of acquisition is being amortized over
periods ranging from 6 to 20 years, using the straight-line method.

27
<PAGE>

J. Income Taxes
In February 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("FAS
#109"). Under the asset and liability method of FAS #109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under FAS #109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.

Effective January 1, 1992, the Company adopted FAS #109 which did not result
in any cumulative adjustment to the accompanying consolidated financial
statements.

K. Postretirement Benefits Other Than Pensions
World Airways' cockpit crewmembers and eligible dependents are covered under
postretirement health care benefits to age 65. Effective January 1, 1992, World
Airways adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" ("FAS
#106"). The Company elected to immediately recognize the cumulative effect of
the change in accounting for postretirement benefits of $2.0 million. The
Company funds the benefit costs on a pay-as-you-go (cash) basis.

L. Transactions in Subsidiaries' Stock
Gains or losses realized in connection with the sale of stock by a subsidiary
are recognized in income by the Company.

2. OPERATING ENVIRONMENT

The Company is highly leveraged primarily due to losses sustained by World
Airways' scheduled operations between 1979 and 1986, debt restructurings in 1984
and 1987, and losses the Company incurred in the past several years. In
addition, the Company incurred substantial debt and operating lease commitments
during 1993 in connection with acquiring MD-11 aircraft and related spare parts.
As of December 31, 1994, the Company was not in compliance with certain
covenants related to World Airways' financial condition and operating results
under a bank credit facility. The Company obtained a waiver of these covenants
from the financial institution.

The Company's investment in its US Order subsidiary has also required
substantial support by WorldCorp in recent years. US Order has generated
operating losses since its inception. US Order's interactive products and
services are subject to the risks inherent in the marketing and development of
new products. The market for US Order's products and services is new and is
characterized by rapid technological change, evolving industry standards,
changes in end-user requirements and frequent new product introductions and
enhancements. To date, US Order has generated limited revenues through the sale
of its products and services.

The Company has historically financed its working capital and capital
expenditure requirements out of cash flow from operating activities, secured
borrowings, and other financings from banks and other lenders. In addition,
during 1994, the Company completed two transactions which provided cash which
was utilized to help meet its operating and debt service requirements in 1994.
First, on February 28, 1994, pursuant to an October 1993 agreement, WorldCorp,
World Airways, and MHS Berhad ("MHS") entered into a stock purchase agreement in
which MHS purchased 24.9% of World Airways' common stock for $27.4 million in
cash. During 1994, MHS also acquired 32% of Malaysian Airline System Berhad
("MAS"), the flag carrier of Malaysia. MAS is one of World Airways' largest
commercial customers (see Note 4). Second, in August 1994, US Order sold its
electronic bill pay operations to VISA International Services Association, Inc.
("VISA") for $15.0 million, assumption of certain liabilities, and a 72 month
royalty stream commencing January 1, 1995 and ending December 31, 2000. Of the
proceeds received by US Order, $9.4 million was used to retire a portion of its
preferred stock (of which WorldCorp received $3.3 million)

28
<PAGE>

and vested employee options. As of December 31, 1994, approximately $2.5
million of these proceeds were available to fund future working capital
requirements of US Order. US Order does not expect to receive any significant
royalty payments in 1995 (see Note 3).

As noted above, the Company has substantial debt service and operating lease
obligations in 1995 (see Notes 11 and 12). In addition, World Airways estimates
that its required capital expenditures for MD-11 integration will be
approximately $9.8 million in 1995 and it will also require approximately $8.0
million to purchase a spare engine in the fourth quarter of 1995. While World
Airways is currently seeking financing for the purchase of the engine and
additional spare parts relating to the MD-11 aircraft recently acquired, no
assurances can be given that the Company will obtain the necessary financing.
World Airways has also obtained regulatory approval from the government of
Israel to operate a scheduled service between New York and Tel Aviv commencing
in the Summer of 1995. World Airways anticipates working capital requirements
of approximately $2.0 million in 1995 in connection with the start of this
scheduled service.

The Company has taken, and continues to pursue, a number of actions which it
believes will enable it to meet its obligations in 1995. World Airways recently
concluded a series of contracts with MAS that will result in World Airways'
operation of two passenger aircraft until 1997, one freighter aircraft until
1999, and two freighter aircraft until 2000 (see Note 4). These contracts and
related rate improvements, along with recent agreements with other commercial
customers, have absorbed a substantial portion of the Company's 1995 aircraft
capacity and resulted in substantial increases in the Company's backlog of
business. Approximately 90% of this backlog represents contracts in place with
MAS. As a result of these contracts, World Airways expects that the percentage
of the Company's total revenue generated from MAS will increase significantly
over historical levels.

In addition, in order to make World Airways more cost-competitive with
certain passenger and cargo carriers, and to improve cash flow, World Airways'
management has taken a series of steps to reduce operating costs. These steps
generally involve eliminating business activities that are not essential to
World Airways' operations, including eliminating those costs which customers are
not prepared to compensate for in the form of higher prices. World Airways'
management believes that these actions, which began in the second half of 1994,
should result in improvements in operating income and cash flow. The shift in
the Company's business to more patterned flying, made possible by the long-term
contracts it has obtained, should also enable the Company to achieve certain
operating cost efficiencies.

In 1995, World Airways amended its $20.0 million credit facility agreement to
adjust certain covenants beginning in the first quarter of 1995 and extended the
credit facility's term to 1998. In addition, the amended agreement provides for
up to an additional $2.0 million in borrowing capacity, subject to spare part
valuations, beginning in October 1995. Also, in the first quarter of 1995,
World Airways received approximately $6.0 million in working capital and short-
term financing, bearing interest at approximately 11%. Approximately $5.2
million of this financing is due in the second quarter of 1995. The remaining
balance will be repaid in monthly installments through December 1995.

In 1994 and in January 1995, respectively, US Order entered into strategic
alliances with VISA in the financial services industry and Colonial Data in the
telecommunications industry (see Note 3). The Company believes that these
alliances will increase revenues for US Order. US Order is also currently
seeking additional equity financing as well as attempting to sell certain of its
assets, including its $2.5 million advertising credit. However, there can be no
assurance that such financing will be obtained.

As of December 31, 1994, the Company holds approximately $14.1 million (at
book value) of aircraft spare parts and transaction processing terminals
currently available for sale.

The Company believes that the combination of the financings consummated to
date and the operating and additional financing plans described above will be
sufficient to allow the Company to meet its operating and capital requirements
in 1995.

3. INVESTMENT IN US ORDER

On September 10, 1990, the Board of Directors of WorldCorp unanimously
authorized WorldCorp to enter into and consummate a Stock Purchase Agreement
dated as of September 14, 1990 (the "Stock Purchase Agreement"),

29
<PAGE>

under which WorldCorp agreed to purchase Series A Preferred Stock ("the
Preferred Stock") issued by US Order. The Board of Directors of the Company
authorized the purchase of US Order, which has had limited revenue to date, as
part of the Company's continuing efforts to diversify its interests. In
connection with this agreement, the Company was granted an option to purchase
the common stock held by the founding shareholders. Mr. Gorog is Chairman of
the Board of US Order and is Chairman of the Board of Directors of WorldCorp.
Mr. Gorog, together with certain members of his immediate family (the
"Founders"), were majority owners of US Order.

On July 1, 1992, the Company purchased an incremental 6% of the preferred
stock of US Order for $1.0 million which increased the Company's ownership in
US Order to 51%. Accordingly, US Order's financial position, results of
operations, and statement of cash flows have been consolidated in the
accompanying financial statements for the period subsequent to July 1, 1992.
All significant intercompany balances have been eliminated. Prior to July 1,
1992, WorldCorp's investment was accounted for using the equity method.

In December 1992, WorldCorp agreed to convert $7.6 million in principal
amount of loans from WorldCorp to US Order into 7,550 shares of redeemable
preferred stock of US Order. The preferred stock earns quarterly dividends at a
rate of 7.5%. As part of this transaction, WorldCorp's option to purchase
additional shares of the capital stock of US Order was extended from September
15, 1993 to December 15, 1994, and WorldCorp received an exclusive license to
apply US Order's transaction processing technology to lottery and gaming
applications. In August 1994, US Order redeemed $3.3 million (or 3,250 shares)
of this redeemable preferred stock.

In December 1993, US Order completed a private equity placement for $12.0
million with financial and strategic partners. WorldCorp invested $1.7 million
in this equity offering. Following this transaction, the Company owned 46% of
the voting stock of US Order. At that time, US Order was still in the
development stage and, therefore, the gain of $0.8 million resulting from this
transaction was recorded as additional paid-in capital in the accompanying
consolidated financial statements. As of December 1993, WorldCorp had purchased
for $5.3 million a total of 5,204,082 shares of US Order preferred stock, which
are convertible into common stock.

As of December 31, 1994, WorldCorp owns 52% of the voting stock of US Order.
WorldCorp and the financial and strategic partners of US Order own stock which
carry liquidation preferences pursuant to which WorldCorp, at December 31, 1994,
is entitled to 64% of any distributions. The results of operations of US Order
are allocated based on liquidation preferences.

WorldCorp provided consulting services to assist US Order's management during
1994, 1993 and 1992. US Order paid consulting fees to WorldCorp equal to the
cost of the salary and benefits of WorldCorp personnel who performed these
services.

On August 1, 1994, US Order sold its electronic banking and bill payment
operations to VISA International Services Association, Inc. ("VISA") for
$14,645,101 in cash (net of closing costs of $227,978), the assumption of
certain of US Order's capital lease obligations and other miscellaneous
liabilities totaling $853,370, 100 shares of VISA's redeemable preferred stock,
and a 72 month royalty stream commencing January 1, 1995 and ending December 31,
2000 (the "Royalty Period"). The Company recognized a gain of $14.5 million
(before minority interest of $3.9 million) from this sale. Of the proceeds
received by US Order, $9.4 million was used to retire a portion of its preferred
stock (of which WorldCorp received $3.3 million) and to cancel vested employee
options. As of December 31, 1994, approximately $2.5 million of these proceeds
were available to fund future working capital requirements of US Order. The
royalty amount is based on the number of VISA customers using the electronic
banking and bill payment technology sold by US Order to VISA. The first $75,000
of royalties earned during each quarter on a cumulative basis for a total of ten
quarters will be applied by VISA to offset certain liabilities assumed by VISA
pursuant to the acquisition. No assurances can be given as to the amount of the
royalty payments that will be received from VISA. US Order does not expect to
receive any significant royalty payments in 1995.

30
<PAGE>

by VISA or any of its members. Until August 1, 1995, VISA also agreed not to
designate any third party as a preferred provider of the Company's services. In
January 1995, US Order signed a two-way exclusive strategic alliance with a
leading manufacturer of Caller ID units, Colonial Data Technologies, to jointly
develop and distribute US Order's next generation of smart telephones to the
telecommunications industry.

On August 25, 1994, the Company's Board of Directors approved the exercise of
WorldCorp's option to purchase 4.8 million shares of US Order common stock held
by its the founders. Under the terms of this agreement, WorldCorp would pay
$3.9 million, consisting of $2.1 million in shares of WorldCorp common stock and
$1.8 million in cash. Prior to year-end, WorldCorp paid $0.4 million in cash to
the Founders in exchange for 498,794 shares of US Order common stock, increasing
WorldCorp's ownership of voting stock to 52%. Effective February 16, 1995,
WorldCorp purchased the remaining 4.3 million shares of US Order common stock
with 302,282 shares of WorldCorp common stock, $0.3 million in cash, and $1.1
million in the form of notes due to the Founders. These notes are due in 1995.
As a result of this option exercise, WorldCorp increased its ownership in US
Order's voting stock to approximately 89% in February 1995.

4. TRANSACTIONS WITH MHS/MAS

On October 30, 1993, WorldCorp, Inc., World Airways, Inc., and MHS Berhad
("MHS") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement")
pursuant to which MHS, subject to satisfactory completion of its due diligence
investigations, agreed to purchase 24.9% of World Airways' common stock for
$27.4 million in cash. Under this Agreement, World Airways would receive upon
closing $12.4 million to fund its working capital requirements. The remaining
$15.0 million would be paid to WorldCorp to add to its cash reserves. The
Company received $2.7 million prior to December 31, 1993 as an advance on the
sales price. At the time of the signing of the Stock Purchase Agreement, World
Airways was a wholly-owned subsidiary of WorldCorp. On February 28, 1994,
WorldCorp, World Airways, and MHS concluded the transaction according to the
terms described above. As a result of this transaction, WorldCorp recognized a
gain of approximately $27.0 million in the first quarter of 1994. Under this
agreement, if at any time after October 30, 1996 World Airways registers its
common stock under the Securities Act of 1993, MHS has the right to demand the
registration of its shares. Also, if without the prior written consent of MHS:
(1) World Airways sells all or substantially all of its business; or (2) World
Airways fundamentally changes its line of business, then MHS has the option (a)
to sell or transfer all or a portion of its shares to a third party
notwithstanding the aforementioned three-year holding period; and/or (b) to
require WorldCorp to purchase all or part of MHS's shares at fair market value.
Fair market value may not be less than the aggregate of the costs borne by MHS
in acquiring and holding its World Airways shares. Management has indicated
that it does not intend to take any such actions without the prior consent of
MHS.

During 1994, MHS acquired 32% of Malaysian Airline System Berhad ("MAS"), the
flag carrier of Malaysia. World Airways has provided service to MAS since 1981,
providing aircraft for integration into MAS' scheduled passenger and cargo
operations as well as transporting passengers for the annual Hadj pilgrimage.
The current MAS Hadj contract, which was entered into in 1992, expires in 1996.
In 1994, World Airways provided two aircraft for Hadj operations. World Airways
expects to provide three aircraft for the 1995 Hadj operations. MAS is one of
World Airways' largest commercial customers (see Note 17).

Effective December 31, 1994, WorldCorp agreed to pay MHS $8.5 million in
exchange for 5% of World Airways' common stock held by MHS and the execution of
a series of long-term contracts between World Airways and MAS. The $8.5 million
note to MHS is due in December 1995 (see Note 11). As a result of this
transaction, effective December 31, 1994, MHS owns 19.9% of World Airways'
common stock.

Under the terms of its new long-term contracts with MAS, World Airways will
operate three freighter aircraft for at least 400 hours per aircraft per month
(or a total of at least 1,200 hours per month). One freighter is currently in
service and will operate through September 1999; two additional freighters will
begin service in June 1995 and operate through September 2000. These contracts
provide for hourly rates that reflect generally improved market conditions.
Also under the new contracts, MAS has extended through March 1997 the operation
of two MD-11 passenger aircraft that had been previously contracted by MAS to
operate from October 1994 through March 1995. Each aircraft will operate a
minimum of 320 hours per month (or a total minimum of 640 hours per month) at
rates that reflect generally improved market conditions.

Of the $8.5 million consideration paid to MHS, $3.0 million is attributable
to the contract enhancements

31
<PAGE>

discussed above. This amount is included in other assets and deferred charges
in the accompanying December 31, 1994 consolidated balance sheet, and is being
amortized over the terms of the MAS contracts, approximately two to five years.

5. SALE OF KEY AIRLINES

In September 1992, WorldCorp decided to dispose of its wholly-owned
subsidiary, KeyAir, and on October 6, 1992, WorldCorp entered into a letter of
intent to sell the stock of KeyAir to Savannah Aviation Group ("SAG"). The sale
of KeyAir was completed on October 23, 1992. Accordingly, KeyAir's net loss for
1992 is reflected in the accompanying financial statements, under the caption
"Loss from operation of Key Airlines". Included in "Loss from operation of Key
Airlines" in 1992 is $40.7 million of KeyAir operating revenues and $46.7
million of KeyAir operating expenses. Under the terms of the stock purchase
agreement, WorldCorp sold all of the outstanding common shares of KeyAir for
$6.5 million. As consideration for the shares, WorldCorp accepted a $3.5
million Senior Secured Note (the "Note") and a $3.0 million Convertible
Subordinated Debenture (the "Debenture") from SAG, which were not recorded by
the Company due to uncertainty regarding realization of these amounts.
WorldCorp recorded an estimated loss on the sale of KeyAir of $31.4 million in
the accompanying financial statements as of December 31, 1992. Loss on sale of
KeyAir in 1992 consisted primarily of a writedown of the B727 aircraft and
related rotables to estimated net realizable values and a write-off of the
remaining goodwill associated with the purchase of KeyAir in 1987. As a result
of the sale of KeyAir and the Company's inability to deploy the aircraft in
other long-term opportunities beyond 1992, the Company discontinued operating
the B727-100 aircraft after December 31, 1992. The Company entered into a
consignment agreement with a third party to dismantle and sell certain of the
B727-100 aircraft and the related rotables beginning in November 1992. As a
result, in 1992, the Company reduced the carrying values of the B727 aircraft to
estimated net realizable values and classified these amounts as assets held for
sale in the accompanying balance sheet (see Note 9).

On February 8, 1993, KeyAir filed a voluntary petition for bankruptcy
protection under Chapter 11 and certain disputes arose between the Company and
the purchasers of KeyAir. During 1993, in connection with the settlement of
these disputes, the Company relinquished all rights to collection of the Notes
and the Debentures. The Company recorded a loss of approximately $0.8 million in
1993 related to amounts outstanding under a line of credit and certain letters
of credit related to KeyAir which will not be recovered by the Company.

6. SUPPLEMENTAL INFORMATION -- STATEMENTS OF CASH FLOWS

Additional information pertaining to certain cash payments and noncash
investing and financing activities is as follows (in thousands):

<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------
1994 1993 1992
---------- --------- ---------
<S> <C> <C> <C>
Cash paid for:
Interest $11,550 $10,274 $12,722
Income taxes 140 91 129
</TABLE>

In December 1994, WorldCorp agreed to pay MHS $8.5 million in exchange for
the 5% of World Airways' common stock held by MHS and the execution of a series
of long-term contracts with MAS (see Note 4). Additionally, World Airways paid
approximately $1.8 million and exchanged a DC10 engine valued at approximately
$1.0 million in connection with the settlement of maintenance reserves due on
the return of three DC10 aircraft in 1994.

During 1994 and 1993, US Order entered into capital leases and other long-
term obligations of $0.2 million and $1.7 million, respectively, in connection
with the purchase of transaction processing equipment. Additionally, during
1994, $0.8 million of capital leases and other obligations were assumed by VISA
(see Note 3).

During 1994, US Order redeemed preferred stock through the issuance of a note
payable of $0.9 million.

During 1993, US Order completed a $12.0 million private equity placement in
which WorldCorp invested $1.7 million (see Note 3). Included in the remaining
$10.3 million investment was $2.5 million received in the form of an advertising
credit and $4.3 million received in the form of forgiveness of various
liabilities of US Order.

32
<PAGE>

During 1993, the Company sold $9.5 million of MD-11 aircraft spare parts and
leased the parts back under a 79 month capital lease. The following is a
summary of the transaction (in thousands):

<TABLE>
<S> <C>
Sale price of parts $9,463
Debt retired (7,570)
Security deposit (1,893)
-------
Net cash proceeds $ 0
=======
</TABLE>

During 1992, the Company purchased $48.8 million of its 13 7/8% Subordinated
Notes (the "Notes"). The following is a summary of the transaction (in
thousands):

<TABLE>
<S> <C>
Face value of Notes purchased $48,806
Cash paid (50,453)
Debt discount and issuance costs (1,606)
--------
Extraordinary gain (loss) $ (3,253)
========
</TABLE>

7. SHORT-TERM INVESTMENTS

At December 31, 1994 and 1993, short-term investments consist of cash pledged
as collateral for letters of credit with expiration dates in excess of ninety
days.

8. OTHER ASSETS AND DEFERRED CHARGES

Other assets and deferred charges consist of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
--------------
1994 1993
------ ------
<S> <C> <C>

Debt issuance costs, net $2,326 $3,062
Long-term notes receivable (Notes 15 and 18) 2,436 --
Deferred contract cost (Note 4) 3,000 --
Aircraft integration costs, net 1,927 2,673
------ ------
$9,689 $5,735
====== ======
</TABLE>

Debt issuance costs consist of the costs of issuing the 13 7/8% Subordinated
Notes due 1997, the Convertible Subordinated Debentures due 2004, and revolving
lines of credit agreements. These costs are being amortized over the term of
the respective debt instruments using the effective interest method (see Notes
11 and 12).

Aircraft integration costs consist of pre-operating costs incurred in
connection with integrating the new MD-11 aircraft into the Company's fleet (see
Note 12). These costs, consisting primarily of flight crew training, are being
amortized on a straight-line basis over a five-year period.

Prepaid expenses and other current assets at December 31, 1994 includes
prepaid insurance of approximately $4.8 million.

9. ASSETS HELD FOR SALE

Assets held for sale consist primarily of DC10 and B727 rotables with a net
book value of $11.8 million and two DC10 engines with a net book value of $2.0
million. The Company has consigned these parts with a third party to sell these
parts over a reasonable period of time with the objective of maximizing the
proceeds from sale. During 1993, US Order recorded a $1.8 million writedown
associated with its older generation of terminal components, a portion of which
are available for sale.

10. INTANGIBLE ASSETS

As a result of various transactions in the capital stock of US Order during
1994 (see Note 3), the Company recorded approximately $1.7 million of goodwill,
which is being amortized over approximately six years using the straight-line
method.

33
<PAGE>

Effective December 31, 1994, the Company agreed to purchase 500,000 shares of
MHS's 2,490,000 shares of World Airways common stock for $8.5 million, resulting
in goodwill of $5.5 million (see Note 4). This amount is being amortized over
20 years using the straight-line method.

11. NOTES PAYABLE

In 1993, World Airways entered into an $8.0 million revolving line of credit
borrowing arrangement which is collateralized by certain receivables which were
sold to the bank with recourse. Borrowing availability under the line is based
on the amount of eligible receivables. At December 31, 1994, World Airways had
no unused borrowing capacity available. Borrowings under the line of credit
were $2.8 million at December 31, 1994 and bear interest at the greater of the
federal funds rate plus 2.5% or the prime rate plus 2%. At December 31, 1994,
the interest rate was 10.5%. World Airways is required to pay any outstanding
amounts under the line of credit on January 7, 1998. This agreement contains
certain covenants related to World Airways' financial condition and operating
results, including minimum quarterly net income tests. World Airways was not in
compliance with its debt covenants as of December 31, 1994, but has obtained a
waiver of these covenants from the financial institution. In 1995, World
Airways amended this agreement to adjust certain covenants beginning in the
first quarter of 1995. No assurances can be given that the Company will meet
these revised covenants or, if required, obtain the required waivers. There is
also an unused facility fee of 0.5% per year (see Note 12).

Also included in notes payable as of December 31, 1994 are the following: a
$4.38% note payable in the amount of $4.4 million with principal and interest
payable monthly in 1995; and a 6.0% note payable to MHS in the amount of $8.5
million with principal and interest due December 31, 1995 (see Note 4).

Subsequent to December 31, 1994, the Company entered into notes payable of
$1.1 million, due during 1995, to the founders of US Order, in connection with
the purchase of the founders' stock in US Order (see Note 3). Also, in the
first quarter of 1995, World Airways received approximately $6.0 million in
working capital and short-term financing. This financing bears interest at
approximately 11%. Approximately $5.2 million of this financing is due in the
second quarter of 1995. The balance will be repaid in installments through
December 1995.

12. LONG-TERM OBLIGATIONS

Long-Term Debt

The Company's long-term obligations at December 31 are as follows (in
thousands):
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Note payable due 1995 -- with interest at one month LIBOR plus 1.95% $ 300 $ 1,020
payable monthly (7.95% at December 31, 1994 and 5.51% at December 31,
1993) collateralized by one General Electric CF6-50C2 engine.

Note payable due 1994 -- with interest at one month LIBOR plus -- 952
1.75% payable monthly (5.31% at December 31, 1993) collateralized by
one General Electric CF6-50C2 engine.

Spare parts loan due 1998 -- with principal and interest at 8.5% 4,004 4,392
payable monthly, collateralized by certain MD-11 spare parts.

Spare parts loan due 1997 -- with principal paid semi-annually
beginning in 1995 and interest at 8.5% payable semi-annually, 5,000 5,000
collateralized by certain MD-11 spare parts.

Aircraft parts security agreement payable to a
bank due 1998 -- with interest at the greater of the 6,371 11,815
federal funds rate plus 2.5% or the prime rate plus 2%
(10.5% at December 31, 1994 and 8% at December 31, 1993)
collateralized by DC10-30 and B727-100 rotables.

Guaranteed bank loan due 1996 -- with interest at 85% of the
prime rate -- 1,914

</TABLE>

34
<PAGE>

<TABLE>
<S> <C> <C>
of interest payable monthly (5.1% at December 31, 1993) collateralized
by 478,501 shares of WorldCorp common stock held by the WorldCorp
Employee Stock Ownership Plan (see Note 15).

Unsecured promissory note due 1997 -- with interest at 6% payable
quarterly beginning May 8, 1994. 900 900

Unsecured promissory note due 1998 -- with interest at 5.75% payable at
maturity. 1,133 --

13 7/8% Subordinated Notes due August 15, 1997 -- interest payable
semi-annually beginning February 15, 1988 (net of unamortized discount
of $0.1 million in 1994 and 1993). 24,942 24,926

Convertible Subordinated Debentures due 2004 -- with interest at 7%
payable semi-annually beginning May 15, 1992. The Debentures are
convertible into WorldCorp common stock at $11.06 per share subject to
adjustment in certain events. 65,000 65,000

Deferred aircraft rent, non-current 1,522 1,850

Capitalized lease obligations 9,860 11,280
-------- --------

Total 119,032 129,049

Less: current maturities 9,664 10,448
-------- --------

Total long-term obligations, net $109,368 $118,601
======== ========
</TABLE>

The Indenture pursuant to which the 13 7/8% Subordinated Notes (the
"Indenture") were issued may restrict the Company's ability to pay dividends on
its common stock. Under the Indenture, the Notes are redeemable beginning
August 15, 1992, at which time they are redeemable at 104% of par value and at
rates declining thereafter.

In May 1992, the Company issued $65.0 million of Convertible Subordinated
Debentures due 2004 (the "Debentures"). The Debentures are convertible into
WorldCorp common stock at $11.06 per share, subject to adjustment in certain
events, and bear an annual interest rate of 7%. Semi-annual interest payments
are due on May 15 and November 15. During the second and third quarters of
1992, the Company used $47.1 million of the proceeds from this borrowing to
retire a portion of its 13 7/8% Subordinated Notes due 1997 (the "Notes").

The aircraft parts security agreement is subject to the terms of the $8.0
million revolving line of credit borrowing (see Note 11). Under this agreement
the borrowing must be reduced by the amount of proceeds received from the sale
of excess DC10 and B727 spare parts, but at a minimum of $0.5 million each
month. The borrowing facility also restricts World Airways' ability to pay
dividends. Under this agreement, World Airways cannot declare, pay, or make any
dividend or distribution in excess of the lesser of $4.5 million or 50% of net
income for the previous six months. In addition, World Airways must have a cash
balance of at least $7.5 million immediately after giving effect to such
dividend. In 1995, World Airways amended this agreement to adjust certain
covenants beginning in the first quarter of 1995, extend the credit facility to
1998, and to defer payments of principal due in February and March, 1995 until
the second quarter of 1995. No assurances can be given that the Company will
meet these revised covenants or, if required, obtain the required waivers. In
addition, the amended agreement provides for up to an additional $2.0 million in
borrowing capacity, subject to spare part valuations, beginning in October 1995.

35
<PAGE>

The following table shows the aggregate amount of scheduled principal
maturities (in thousands) of debt outstanding at December 31, 1994:

<TABLE>
<S> <C>
1995 $ 8,830
1996 2,187
1997 27,716
1998 3,974
1999 --
Thereafter 65,000
--------
Total $107,707
========
</TABLE>

In January 1995, the ESSOP refinanced its debt to the Company through a
margin loan (the "Refinanced ESSOP Loan") in the amount of $1.5 million.
Principal payments of $90,000 are due quarterly and a final principal payment of
$1,050,000 is due May 1996. Interest is payable quarterly at the call loan rate
plus 1.5%. The Refinanced ESSOP Loan is collateralized by 361,401 of
unallocated shares of common stock owned by the ESSOP (see Note 15).

Deferred Aircraft Rent

During 1993, the Company negotiated with several of its lessors to defer
approximately $14.7 million of lease payments on eight aircraft. Of this
amount, $12.9 million was repaid during 1993 and 1994. The remaining deferrals
bear interest at rates ranging from 7% to 12%, and are due as follows (in
thousands):

<TABLE>
<S> <C>
1995 $ 907
1996 553
1997 240
1998 257
1999 276
Thereafter 196
------
Total $2,429
======
</TABLE>

Capital Leases

The present values of the obligations under capital leases at December 31,
1994 are calculated using rates ranging from 6.14% to 11.7%. The following are
scheduled minimum capital lease payments (in thousands) due in the succeeding
five years and thereafter, together with the present value of such obligations:

<TABLE>
<S> <C>
1995 $ 1,832
1996 2,072
1997 1,779
1998 3,381
1999 1,313
Thereafter 2,941
-------
Total minimum lease payments 13,318
Less imputed interest 3,458
-------
Present value of obligations under capital leases $ 9,860
=======
</TABLE>

Property under capital leases consists of equipment leases and are amortized
on a straight-line basis over the lease terms or expected useful lives of the
assets. Accumulated amortization under capital leases was $3.0 million and $3.2
million at December 31, 1994 and 1993, respectively. Amortization expense of
property under capital leases totaled $970,000, $658,000, and $522,000 for the
years ended December 31, 1994, 1993, and 1992, respectively.

Operating Leases

In October 1992 and January 1993, World Airways signed a series of agreements
with International Lease Finance Corporation ("ILFC"), McDonnell Douglas
Corporation, GATX Capital Corporation, and Pratt and Whitney

36
<PAGE>

to lease seven new McDonnell Douglas MD-11 aircraft under initial lease terms of
two to five years. Six of the seven aircraft leases contain annual renewal
options in years three through fifteen of the lease term. Under the terms of
the lease agreements, World Airways may be required to pay additional rent in
excess of the fixed monthly amounts depending on block hours flown. As of
December 31, 1994, World Airways' fleet consisted of four passenger MD-11
aircraft, one freighter MD-11 aircraft, two convertible DC10 aircraft, and one
freighter DC10 aircraft. Subsequent to December 31, 1994, World Airways took
delivery of two convertible MD-11's and one DC10 aircraft. The leases contain
options to purchase the aircraft at various times throughout the lease terms.
Long-term deposits consist primarily of deposits on the MD-11 leases. As part
of the lease agreements, World Airways was assigned purchase options for four
additional MD-11 aircraft. In 1992, World Airways made non-refundable deposits
toward four of the option aircraft. During 1995, the options' exercise dates
were extended to May 31, 1995, with scheduled aircraft delivery dates beginning
no earlier than 1996. If the options are exercised, World Airways intends to
obtain financing for the purchases.

World Airways plans to exit DC10 aircraft and ultimately standardize its
fleet around the MD-11 aircraft. World Airways, however, has recently entered
into two short-term DC10 aircraft leases with lease terms expiring June 1995 and
August 1995, and one DC10 aircraft lease term expiring in September 1997. World
Airways may choose to lease additional DC10 aircraft to meet short-term peak
demand requirements.

In February 1992, World Airways signed twelve-year operating leases for two
McDonnell Douglas DC10-30 passenger aircraft. In July 1993, World Airways
returned these aircraft to their lessor which resulted in a $1.5 million early
termination payment of which $1.1 million was expensed in 1993.

In October 1993, the Company returned an aircraft to its lessor and recorded
an expense of $1.2 million related to the early termination of the lease.

Rental expense, primarily relating to aircraft leases, totaled approximately
$53.9 million, $52.1 million, and $39.6 million for the years ended December 31,
1994, 1993, and 1992, respectively.

The following is a schedule of future annual minimum rental payments,
principally aircraft rentals (excluding variable portions), required under
operating leases that have initial or remaining noncancellable lease terms in
excess of one year as of December 31, 1994, including the leases entered into
subsequent to year-end (in thousands):

<TABLE>
<S> <C>
1995 $ 60,852
1996 62,193
1997 62,255
1998 61,447
1999 55,730
Thereafter 451,923
--------
Total $754,400
========
</TABLE>

These future annual minimum rental payments include all option years.

13. COMMON STOCK PURCHASE WARRANTS

Drexel Warrants

On June 30, 1988, the Company issued to Drexel Burnham Lambert, Incorporated
("Drexel") warrants expiring May 24, 1994 to purchase 1,000,000 shares of the
Company's common stock at a price of $8.00 per share, subject to certain anti-
dilution adjustments (the "Drexel Warrants"). On July 31, 1989, the Company
purchased 500,000 of these warrants from Drexel for $1.3 million. In 1992,
37,500 of these warrants were exercised. During 1994, the remaining 462,500
Drexel Warrants expired.

BNYFC Warrants

On December 7, 1993, in connection with a revolving line of credit facility
and an aircraft parts security agreement (see Notes 11 and 12), the Company
granted to Bank of New York Financial Corporation ("BNYFC") warrants expiring
December 7, 1996 to purchase 250,000 shares of the Company's common stock, at a
price of $6.15

37
<PAGE>

per share. At December 31, 1994, these warrants were fully vested and
outstanding. These warrants expire on December 7, 1996.

1986 Executive Warrants

During 1986, the Company entered into agreements with certain officers of the
Company to issue 3,600,000 warrants, expiring May 24, 1994, each to purchase
one share of the Company's common stock at a price of $5.00 per share, subject
to certain anti-dilution adjustments (the "1986 Executive Warrants"). During
1994 and 1993, 90,000 and 779,875, respectively, of these warrants were
exercised. No warrants were exercised in 1992. During 1994, the remaining
2,272,336 1986 Executive Warrants expired.

1989 Executive Warrants

During 1989, the Company entered into warrant agreements with certain
officers of the Company providing for the issuance of warrants ("the 1989
Executive Warrants") to purchase a total of 745,000 shares of Company common
stock at an exercise price of $5.50; such warrants to vest, at differing rates,
over 60 months. The 1989 Executive Warrants expire on August 31, 1997. On
November 1, 1990, Mr. T. Coleman Andrews cancelled his right to receive 250,000
warrants granted to him under his 1989 Executive Warrant agreement, and the
agreement was terminated. Mr. Andrews agreed to cancel his right to receive the
250,000 warrants so that equity compensation under the 1988 Stock Option Plan
could be granted in 1990 to officers of the Company and its subsidiaries.
During 1991, 163,417 of the warrants were cancelled. During 1992, 40,000 of
these warrants were cancelled. At December 31, 1994 and 1993, there were
291,583 1989 Executive Warrants fully vested and outstanding.

14. STOCK OPTIONS

On July 19, 1988, the Board of Directors approved The WorldCorp, Inc. 1988
Stock Option Plan (the "1988 Plan"). The 1988 Plan was amended and restated on
May 13, 1992. The 1988 Plan calls for one share of WorldCorp common stock to be
issued upon exercise of one stock option. Shares issuable under the 1988 Plan,
as amended, shall not exceed 2,800,000 in the aggregate. Options may be granted
to employees and directors at the discretion of the Administrative Committee of
the 1988 Plan. In 1990, the 1988 Plan was amended to change the vesting
percentage to 20% per year beginning on the grant date provided that the grantee
was still an employee of the Company or a subsidiary.

In August 1994, the Company granted 1,050,000 options to an officer and a
board member of the Company. These options become vested at various times
through May 2004. During 1994, approximately $1.1 million of compensation
expense was recognized in connection with the vested portion of these options.

A summary of option transactions under the 1988 Plan for the years ended
December 31, 1992, 1993, and 1994 is presented below:
<TABLE>
<CAPTION>

<S> <C>
Options outstanding, January 1, 1992 1,294,387
Options granted (exercise prices from $7.70 to $10.59) 590,000
Options exercised (exercise prices from $5.50 to $5.825) (214,091)
Options expired or cancelled (69,334)
---------
Options outstanding, December 31, 1992 1,600,962
Options granted (exercise prices from $4.72 to $7.03) 300,000
Options exercised (exercise price of $5.625) (175,000)
Options expired or cancelled (77,600)
---------
Options outstanding, December 31, 1993 1,648,362
Options granted (exercise prices from $4.50 to $4.56) 1,100,000
Options exercised (exercise prices from $4.72 to $5.625) (176,723)
Options expired or cancelled (249,235)
---------
Options outstanding, December 31, 1994 2,322,404
=========
</TABLE>
A total of 1,528,099 options have vested and are exercisable by the
participants under the 1988 Plan as of December 31, 1994.

38
<PAGE>

15. EMPLOYEE BENEFIT PLANS

During 1989, the Company adopted an Employee Stock Ownership Plan (the
"ESOP") for the benefit of employees not covered by collective bargaining
agreements. The ESOP is designed as a stock bonus plan which qualifies for
favorable tax treatment under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"), and as an employee stock ownership plan under
Section 4975(e)(7) of the Code. In addition, the ESOP includes a "cash or
deferred arrangement" under Section 401(k) of the Code.

During 1989, the ESOP acquired 450,000 shares of common stock from Violet
June Daly and 450,000 shares of common stock from the Estate of Edward J. Daly.
The purchase price in each transaction was $4.00 per share or a total of $3.6
million.

In 1990, the ESOP was replaced by the Employee Savings and Stock Ownership
Plan ("the ESSOP"). Participation in the ESSOP is limited to employees not
covered under a collective bargaining agreement. Employees may elect to invest
Salary Deferral Contributions in either the WorldCorp Stock Fund or in Other
Investment Funds. The ESSOP provides employer matching contributions in the
WorldCorp Stock Fund at a rate determined by the Board of Directors, but at
least 50% of the Salary Deferral Contribution. The employer matching
contribution rate in the WorldCorp Stock Fund for 1994, 1993, and 1992 was 100%.
The employer matching contribution in Other Investment Funds is at the rate of
33 1/3% of the Salary Deferral Contribution. The Company charged approximately
$367,000, $416,000, and $394,000 to expense for its contributions to the ESSOP
in 1994, 1993, and 1992, respectively.

The ESOP obtained bank financing of $3.6 million (the "ESOP Loan") which
required quarterly principal payments of $90,000 and a final principal payment
of $1,080,000. Interest was payable monthly at 85% of the bank's prime rate.
During 1994, the Company paid off the balance of the ESOP loan in the amount of
$1.7 million. ESSOP agreed to repay to the Company the amount of the bank loan
and pledged 472,500 shares to the Company as collateral, subject to release of
shares in connection with each quarterly principal payment. In January 1995,
the ESSOP refinanced its debt to the Company through a margin loan (the
"Refinanced ESSOP Loan") in the amount of $1.5 million. Principal payments of
$90,000 are due quarterly and a final principal payment of $1,050,000 is due May
1996. Interest is payable quarterly at the call loan rate plus 1.5% The
Refinanced ESSOP Loan is collateralized by 361,401 of the unallocated shares of
common stock owned by the ESSOP. The Company is required to make minimum annual
discretionary contributions to the ESSOP in an amount necessary to pay principal
and interest due on the ESSOP Loan to the extent that other contributions to the
ESSOP are insufficient to make such payments. In 1992, contributions from
employees combined with employer matching contributions were sufficient to make
required principal and interest payments. The Company expensed $0.2 million of
principal and interest for the ESOP loan in both 1994 and 1993.

The World Airways' Crewmembers Target Benefit Plan is a defined contribution
plan covering flight engineers and pilots with contributions based upon defined
wages. This is a tax-qualified retirement plan under Section 401(a) of the
Code. The World Airways' Flight Attendants Target Benefit Plan is a defined
contribution plan covering flight attendants with contributions based upon
defined wages. This is a tax-qualified retirement plan under Section 401(a) of
the Code. Pension expense for both plans totaled approximately $1,382,000,
$1,524,000, and $1,288,000 for the years ended December 31, 1994, 1993, and
1992, respectively.

Effective January 1, 1987, World Airways adopted the World Airways, Inc.
Profit Sharing Bonus Plan (the "1987 Profit Sharing Plan"). Contributions to
the 1987 Profit Sharing Plan are equal to 20% of World Airways' defined
operating income, subject to an annual limitation of 10% of the total annual
aggregate compensation of World Airways' employees participating in the 1987
Profit Sharing Plan in that year. This is not a tax-qualified retirement plan
under Section 401(a) of the Code. Prior to 1993, contributions to the 1987
Profit Sharing Plan were allocated first to payments to all persons or their
beneficiaries whose wages were reduced during the time from December 1, 1982 to
January 31, 1985. The total wage reduction for this period was approximately
$5.8 million. World Airways had repaid the entire $5.8 million as of December
31, 1992. Approximately $0.8 million was distributed in 1993 pertaining to 1992
financial results. The Company made no distributions in 1994 pertaining to 1993
financial results and the Company does not anticipate any distributions in 1995
pertaining to 1994 financial results.

39
<PAGE>

World Airways' cockpit crewmembers and eligible dependents are covered under
postretirement health care benefits to age 65. Effective January 1, 1992, World
Airways adopted Statement of Financial Accounting Standards No. 106, Employers'
Accounting for Postretirement Benefits Other Than Pensions ("FAS #106"). FAS
#106 requires accrual accounting for all postretirement benefits other than
pensions. Prior to the adoption of FAS #106, the cost of health benefits for
cockpit retirees was recognized by charging claims to expense as they were
incurred. The Company elected to immediately recognize the cumulative effect of
the change in accounting for postretirement benefits of $2.0 million in 1992.
World Airways funds the benefit costs on a pay-as-you-go (cash) basis.

A summary of the net periodic postretirement benefit costs for the years
ended December 31, 1994, 1993, and 1992 is as follows:

<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Service cost $ 145,000 $ 103,000 $ 91,000
Interest cost on accumulated
postretirement benefit obligation 143,000 156,000 148,000
---------- ---------- ----------
Net periodic postretirement benefit
cost $ 288,000 $ 259,000 $239,000
========== ========== ==========
</TABLE>

The components of the Accumulated Postretirement Benefit Obligation at
December 31, 1994 and 1993 are as follows:

Retirees and dependents $ 935,000 $ 941,000
Fully eligible, active participants 211,000 211,000
Not fully eligible participants 1,238,000 1,098,000
---------- ----------
$2,384,000 2,250,000
Less: plan assets 0 0
---------- ----------
Accrued postretirement benefit
obligation $2,384,000 $2,250,000
========== ==========
</TABLE>

The assumed discount rates used to measure the accumulated postretirement
benefit obligation for 1994 and 1993 were 8.0% and $6.25%, respectively. The
medical cost trend rate in 1994 was 9.75% trending down to an ultimate rate in
2010 of 6.0%. A one percentage point increase in the assumed health care cost
trend rates for each future year would have increased the aggregate of the
service and interest cost components of 1994 net periodic postretirement benefit
cost by $26,000 and would have increased the accumulated postretirement benefit
obligation as of December 31, 1994 by $128,000.

16. FEDERAL AND STATE INCOME TAXES

Effective January 1, 1992, the Company adopted FAS #109. There was no
adjustment necessary for the cumulative effect of this change in accounting for
income taxes as of January 1, 1992. The consolidated provision for income taxes
related to continuing operations consists entirely of current income taxes.

Income tax expense attributable to income from continuing operations consists
of (in thousands):

<TABLE>
<CAPTION>
For the years ended December 31,
---------------------------------
1994 1993 1992
---------- ---------- ---------
<S> <C> <C> <C>
U.S. Federal $ 131 $ 71 $ (29)
State 28 46 57
----- ----- -----
Income tax expense $ 159 $ 117 $ 28
===== ===== =====
</TABLE>

There is no deferred tax expense or benefit for the years ended December 31,
1994, 1993, and 1992.

Income tax expense attributable to income (loss) from continuing operations
for the years ended December 31, 1994, 1993, and 1992 differed from the amounts
computed by applying the U.S. Federal income tax rate of 34 percent as a result
of the following (in thousands):

40
<PAGE>

<TABLE>
<CAPTION>
For the years
ended December 31,
-----------------------------
1994 1993 1992
------- -------- --------
<S> <C> <C> <C>

Expected Federal income
tax expense
(benefit) at the
statutory rate $ 3,569 $(11,457) $(15,195)
Subsidiary (US Order) not
consolidated for tax
purposes (343) 3,130 1,447
Tax loss on sale of
subsidiary -- -- (3,812)
Amortization of goodwill 35 149 281
Equity interest in loss of
investee company -- -- 314
Sale of subsidiary (World
Airways) stock (2,170) -- --
Other 343 386 179
Generation (utilization)
of net operating
loss and capital loss
carryforwards (1,402) 7,879 16,776
Federal alternative
minimum tax and
environmental tax 115 -- --
State income tax expense,
net of Federal benefit 12 30 38
------- -------- --------
Income tax expense $ 159 $ 117 $ 28
======= ======== ========
</TABLE>

The effect of the alternative minimum tax as set forth in the above table is
caused by the limitation on the utilization of net operating loss carryforwards
for alternative minimum tax purposes. The tax effects of temporary differences
that give rise to significant portions of deferred tax assets and liabilities at
December 31, 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
Deductible Taxable Net
Amounts Amounts Total
----------- ------- -----------
<S> <C> <C> <C>
Temporary differences:
Net operating loss carryforwards $ 55,246 $ -- $55,246
Depreciation -- 3,533 (3,533)
Recognition of sale-leaseback gains 2,846 -- 2,846
Accrued maintenance in excess of
reserves paid,
primarily due to accrual for
financial
statement purposes 2,728 -- 2,728
Accrued postretirement benefit
obligation, due to
accrual for financial statement
purposes 811 -- 811
Accrued compensation, primarily due
to accrual for
financial statement purposes 179 -- 179
Other -- 224 (224)
Alternative minimum tax credit
carryforward 2,323 -- 2,323
Investment tax credit carryforward
which expires
primarily by 1995 7,100 -- 7,100
-------- ------- -------
Total gross deferred tax assets and
liabilities $ 71,233 $3,757 $67,476
======== =======
Less: valuation allowance (67,476)
-------
Net deferred tax balance $ 0
=======
</TABLE>

The valuation allowance for deferred tax assets as of January 1, 1994 was
$73.0 million. The net change in the total valuation allowance for the year
ended December 31, 1994 was a decrease of $5.5 million.

In August 1991, 5.7 million shares of common stock were sold by a group of
existing shareholders. This transaction constituted an Ownership Change, which
reduced the annual utilization of net operating loss, alternative minimum tax
credit, and investment tax credit carryforwards ("the Carryforwards") available
to the Company in 1991 and future years. As of December 31, 1994, the Company
had net operating loss carryforwards for federal income tax purposes of $72.6
million [subject to a $6.3 million annual limitation based on the value of the
outstanding Common Stock immediately prior to the Ownership Change and the
statutorily provided long-term tax exempt rate

41
<PAGE>

(the "Limitation")] and $89.9 million (generated after the Ownership Change)
which are available to offset future federal taxable income. These
carryforwards expire between 1997 and 2009.

As a result of the transactions between the Company and MHS during 1994 (see
Note 4), approximately $113.5 million of the consolidated net operating loss
carryforwards for federal income tax purposes (subject to the Limitation) will
be allocated to World Airways, and therefore, will only be available to offset
future federal taxable income of World Airways.

17. SEGMENT INFORMATION

The Company operates in two business segments: air transportation and
transaction processing. The air transportation segment consists of the
operations of World Airways, a worldwide provider of air transportation for
commercial and government customers. The Company's transaction processing
business consists of its 52% ownership of the voting stock of US Order, a
company that designs, develops, and markets information-oriented products and
services that enable wholesalers and resellers to deliver interactive solutions
to their customers.

Summarized financial information by business segment is as follows (in
thousands):

<TABLE>
<CAPTION>
Depreciation
Year Ended Operating Total and Capital
December 31, 1994 Revenues (Loss) Assets Amortization Expenditures
----------------------------- --------- ---------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Air transportation $203,008 $ (8,544) $92,710 $4,463 $ 3,418
Transaction processing 1,432 (10,165) 4,826 749 1,436
-------- -------- ------- ------ -------
$204,440 $(18,709) $97,536 $5,212 $ 4,854
======== ======== ======= ====== =======

<CAPTION>
Depreciation
Year Ended Operating Total and Capital
December 31, 1993 Revenues (Loss) Assets Amortization Expenditures
----------------------------- --------- --------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Air transportation $201,811 $(11,933) $90,425 $6,025 $19,450
Transaction processing 905 (10,875) 7,694 250 3,952
-------- -------- ------- ------ -------
$202,716 $(22,808) $98,119 $6,275 $23,402
======== ======== ======= ====== =======
</TABLE>

There were no significant intersegment sales or transfers during 1994 and
1993.

Information concerning customers for years in which their revenues comprised
10% or more of the Company's consolidated operating revenues is presented in the
following table (in thousands):

<TABLE>
<CAPTION>
Year ended December 31,
-------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
U.S. Department of Defense (including AMC) $44,572 $54,201 $88,683
Malaysian Airline System Berhad (MAS) 38,083 34,672 49,065
P. T. Garuda Indonesia 49,339 42,583 25,284
Look Charters 21,222 12,468 216
Burlington Air Express, Inc. 526 22,358 10,811
</TABLE>

The Company's contract with the United States Air Mobility Command ("AMC")
expires in September 1995. The Company anticipates that future renewals of the
AMC contract will be on an annual basis.

World Airways has provided service to MAS since 1981, providing aircraft for
integration into MAS' scheduled passenger and cargo operations as well as
transporting passengers for the annual Hadj pilgrimage. World Airways recently
entered into a series of long-term contracts with MAS (see Note 4). World
Airways has agreed to provide five aircraft to MAS under long-term contracts
with expirations ranging from March 1997 to September 2000. As a result of
these contracts, World Airways expects that the percentage of the Company's
total revenue generated from MAS in 1995 will increase significantly over the
historical levels shown above. The current MAS Hadj contract,

42
<PAGE>

which was entered into in 1992, expires in 1996. In 1993, World Airways provided
two aircraft for Hadj operations. World Airways expects to provide three
aircraft for the 1995 Hadj operations.

World Airways has provided service to Look Charters under an annual contract
since 1992. In 1994, World Airways performed operations for a summer charter
program transporting passengers between Paris, France, and various locations in
the United States and Mexico. World Airways has recently entered into a
contract with Look Charters to provide operations for a 1995 summer charter
program.

World Airways provided service to Burlington Air Express in 1992 and 1993 and
a limited amount in 1994. At this time, World Airways has no contract for
services in 1995.

All export contracts are denominated in U.S. dollars as are substantially all
of the related expenses. The classification between domestic and export
revenues is based on entity definitions prescribed in the economic regulations
of the Department of Transportation. Information concerning the Company's
export revenues is presented in the following table (in thousands):

<TABLE>
<CAPTION>
Year ended December 31,
----------------------------
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Operating Revenues:
Domestic $ 63,156 $ 96,637 $111,606

Export - Malaysia 38,083 34,672 49,065
- Indonesia 49,339 42,583 25,284
- France 22,217 12,531 732
- Other 31,645 16,293 13,723
-------- -------- --------
Total $204,440 $202,716 $200,410
======== ======== ========
</TABLE>

18. RELATED PARTY TRANSACTIONS

Effective November 10, 1988, T. Coleman Andrews', III employment agreement to
serve as Chief Executive Officer and President of WorldCorp, which was
originally entered into in August 1986, was extended an additional five years to
August 1, 1994. In connection with the employment agreement, Mr. Andrews had
also entered into a Supplemental Incentive Agreement ("the Incentive Agreement")
with WorldCorp that provided for a bonus in the amount of $1,300,000 plus
interest earned at 8.91% to be paid to Mr. Andrews on August 1, 1994, provided
he was still an employee of WorldCorp at that time. In connection with this
employment arrangement, the Company loaned Mr. Andrews $1,300,000 on January
10, 1989. Mr. Andrews executed and delivered to the Company a full recourse
promissory note dated January 10, 1989. The principal amount of the note was
due and payable on December 31, 1994 and interest accrued quarterly and was
payable at maturity at a fixed rate of 8.91% per annum. Effective December 1993,
the Company and Mr. Andrews modified the Incentive Agreement by terminating it
and entering into a new agreement. In connection with the new agreement, the
Company paid Mr. Andrews in December 1993 (approximately seven months early)
$200,830 due him under the Incentive Agreement. The new agreement delays
payment to Mr. Andrews of the balance due under the Incentive Agreement and
provides that the Company will make four annual installment payments of $420,000
beginning January 2, 1995, plus interest earned at 3.83% in 1995 and 1996 and
5.07% in 1997 and 1998. At the same time, Mr. Andrews agreed to cancel his
previous promissory note dated January 10, 1989 and issue a full recourse
promissory note dated December 29, 1993. The principal amount of $1,763,000 is
payable in annual installments of varying amounts beginning January 1, 1994 and
payable every February 1 thereafter until 1998. Interest is payable at 3.83% in
1995 and 1996 and 5.07% in 1997 and 1998. Mr. Andrews has reduced the principal
balance of his obligation to the Company by $280,000 through March 13, 1995.
On August 19, 1994, the Company and Mr. Andrews extended Mr. Andrews' employment
agreement to serve as Chief Executive Officer and President of WorldCorp through
December 31, 1997.

The Incentive Agreement amounts are included in accrued wages in the
accompanying consolidated 1994 and 1993 balance sheets. As of December 31,
1994, $0.4 million of the promissory note is included in prepaid expenses and
other current assets and $1.2 million is included in other assets and deferred
charges in the accompanying

43
<PAGE>

consolidated balance sheets. As of December 31, 1993, the promissory note
amount of $1.8 million is included in prepaid expenses and other current assets
in the accompanying consolidated balance sheets.

As of December 31, 1994, WorldCorp owns 52% of the voting stock of US Order.
In addition, WorldCorp exercised an option to purchase additional shares of the
voting stock of US Order for consideration equal to $3.9 million which increased
its voting ownership percentage to 89% in February 1995 (see Note 3). The
Chairman of the Board of Directors of WorldCorp is also one of the founders of,
and currently the Chairman of the Board of, US Order.

Effective December 31, 1994, MHS Berhad ("MHS") owns 19.9% of World Airways.
During 1994, MHS acquired 32% of Malaysian Airline System Berhad ("MAS"), the
flag carrier of Malaysia. MAS is one of World Airways' largest commercial
customers (see Notes 4 and 17).

Bain & Company, Inc. provided consulting services of approximately $400,000
to the Company during 1994. A principle of Bain & Company is also a member of
the Board of Directors of WorldCorp.

W. Jerrold Scoutt, Jr., a member of the Board of Directors of WorldCorp until
May 1994, is a member of the law firm of Zuckert, Scoutt & Rasenberger,
Washington, D.C. Zuckert, Scoutt & Rasenberger rendered legal services to the
Company during 1994, 1993, and 1992.

19. COMMITMENTS AND CONTINGENCIES

Litigation and Claims

On August 11, 1992, WorldCorp, World Airways, and certain other commercial
paper customers of Washington Bancorporation ("WBC") were served with a
complaint by WBC as debtor-in-possession by and through the Committee of
Unsecured Creditors of WBC (the "Committee"). The complaint arises from
investment proceeds totaling $6.8 million received by WorldCorp and World
Airways from WBC in May 1990 in connection with the maturity of WBC commercial
paper. The Committee seeks to recover $2.0 million from WorldCorp and $4.8
million from World Airways on the grounds that these payments constituted
voidable preferences and/or fraudulent conveyances under the Federal Bankruptcy
Code and under applicable state law. On June 9, 1993, the Company filed a
motion to dismiss this complaint and intends to defend vigorously against these
claims. No assurances can be given of the eventual outcome of this litigation.

In conjunction with US Order's August 1, 1994 sale of its banking operations,
US Order transferred to VISA all of its rights as they related to a patent which
covered various proprietary aspects of the Company's ScanFone automated order
and payment system. Although not technically pending or threatened, US Order
has received notices from these third parties claiming potential infringement of
previously issued patents to these third parties. US Order has also received a
notice of a third party patent infringement claim related to a product currently
under development by the company. US Order and its counsel believe that the
company has substantial defenses to any potential claims of infringement, should
that occur. However, there can be no assurance that such third parties will
not make a formal claim of infringement or that the company would prevail in any
proceedings in relation thereto.

The Company is involved in various other claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position.

Letters of Credit

At December 31, 1994 and 1993, restricted cash and short-term investments
included customer deposits held in escrow and cash pledged as collateral for
various letters of credit facilities issued by a bank on the Company's behalf
totaling $0.7 million and $1.0 million, respectively, with expiration dates
principally occurring in 1995.

Options on MD-11 Aircraft

The Company has options to purchase four MD-11 aircraft, which, if exercised,
would require a downpayment equal to five percent of the purchase price upon
exercise.

44
<PAGE>

20. UNAUDITED QUARTERLY RESULTS

The results of the Company's quarterly operations for 1994 and 1993 are as
follows (in thousands except per share amounts):
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------------------------------------------------------------
March 31 June 30 September 30 December 31 Total Year
--------- ------------------ ------------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1994
Operating revenues $ 32,037 $ 78,522 $ 51,885 $ 41,996 $204,440

Operating income (loss) (8,409) 4,265 (12,392) (2,173) (18,709)

Earnings (loss) before income
taxes and minority interest 15,467 /(a)/ 1,485 (1,181) /(b)/ (5,275) 10,496

Net earnings (loss) 15,596 578 (2,540) (5,326) 8,308

Primary earnings (loss)
per common share:
Net earnings (loss) $ 0.93 $ 0.04 $ (0.16) $ (0.35) $ 0.54
======== ======== ======== =========== ==========

Fully diluted earnings (loss)
per common share:
Net earnings (loss) $ 0.74 $ * $ * $ (0.35) $ 0.53
======== ======== ======== =========== ==========

1993
Operating revenues $ 28,037 $ 86,576 $ 44,253 $ 43,850 $202,716

Operating income (loss) (12,634) 11,384 (12,852) (8,706) /(c)/ (22,808)

Earnings (loss) before income
taxes and minority interest (15,413) 8,706 (15,460) (11,530) (33,697)

Net earnings (loss) (14,188) 9,813 (15,431) (11,139) (30,945)

Primary earnings (loss)
per common share:
Net earnings (loss) $ (1.00) $ 0.61 $ (1.06) $ (0.74) $ (2.12)
======== ======== ======== =========== ==========

Fully diluted earnings (loss)
per common share:
Net earnings (loss) $ (1.00) $ 0.50 $ (1.06) $ (0.74) $ (2.12)
======== ======== ======== =========== ==========
</TABLE>
* Fully dilutive earnings per share are anti-dilutive.

/(a)/ Includes the $27.0 million gain realized on the sale of 24.9% of
World Airways common stock (see Note 4).
/(b)/ Includes the $14.5 million gain realized on the sale of US Order's
electronic banking and bill payment operations (see Note 3).
/(c)/ Includes the effects of the aircraft lease termination expenses of
approximately $2.7 million and a write-down of $1.5 million for older
generation transaction processing equipment.

45
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
WorldCorp, Inc.:

We have audited the accompanying consolidated balance sheets of WorldCorp,
Inc. and subsidiaries (WorldCorp) as of December 31, 1994 and 1993, and the
related consolidated statements of operations, changes in common stockholders'
deficit and cash flows for each of the years in the three-year period ended
December 31, 1994. In connection with our audits of the consolidated financial
statements, we also have audited the related financial statement schedule as
listed in Item 14(a)2 herein. These consolidated financial statements and
financial statement schedule are the responsibility of WorldCorp's management.
Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of WorldCorp,
Inc. and subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1994, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

As discussed in Notes 15 and 16 to the consolidated financial statements,
effective January 1, 1992, WorldCorp adopted the provisions of the Financial
Accounting Standards Board's Statements of Financial Accounting Standards No.
106, Employers' Accounting for Postretirement Benefits Other Than Pensions, and
No. 109, Accounting for Income Taxes.

KPMG PEAT MARWICK LLP

Washington, D.C.
March 13, 1995

46
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
-------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

Directors

The Company incorporates herein by reference the information concerning
directors contained in its Notice of Annual Stockholder's Meeting and Proxy
Statement to be filed within 120 days after the end of the Company's fiscal year
(the "1995 Proxy Statement").

Executive Officers

The following table sets forth the names and ages of all executive officers
of the Company and all positions and offices within the Company presently held
by such executive officers:
<TABLE>
<CAPTION>

Name Age Position Held
---- --- -------------
<S> <C> <C>

T. Coleman Andrews, III 40 Chief Executive Officer, President, and
Principal Accounting Officer

William F. Gorog 69 Chief Executive Officer, US Order, and
Chairman of the Board, WorldCorp

Charles W. Pollard 37 President, World Airways

John C. Backus, Jr. 36 President and Chief Operating Officer, US
Order

Andrew M. Paalborg 39 Vice President and General Counsel
</TABLE>

Mr. T. Coleman Andrews, III was elected Chief Executive Officer, President
and a director of World Airways in August 1986 and of WorldCorp in June 1987.
From 1978 through 1986, he was affiliated with Bain & Company, an international
management consulting firm. At Bain, he was elected partner in 1982 and was a
founding general partner of Bain Capital Fund, a private venture capital
partnership, in 1984. Prior to his experience with Bain & Company, Mr. T.
Coleman Andrews, III served in several appointed positions in the Ford
Administration.

Mr. William F. Gorog has served as Chief Executive Officer of US Order since
May 1, 1990. He was elected a director of WorldCorp in April 1989 and was
elected Vice-Chairman of the WorldCorp Board of Directors in October 1992. From
October 1987 until founding US Order, he served as Chairman of the Board of
Arbor International, an investment management firm. From 1982 to 1987, he
served as President and Chief Executive Officer of Magazine Publishers of
America, a trade association representing the principal consumer publications in
the United States. During the Ford Administration, Mr. Gorog served as Deputy
Assistant to the President for Economic Affairs and Executive Director of the
White House Council on International Economic Policy. Prior to that time, he
founded and served as Chief Executive Officer of Data Corporation, which
developed the LEXIS and NEXIS information systems for legal and media research.
He currently serves as a director of NationsBank (Maryland), a bank holding
company.

Mr. Charles W. Pollard was elected President of World Airways in May 1992.
He was elected General Counsel and Secretary of WorldCorp in October 1987, and
Vice President, Administration and Legal Affairs in October 1990. From August
1983 to October 1987, he practiced law in the corporate department of Skadden,
Arps, Slate, Meagher & Flom, Washington, D.C. Mr. Pollard is a member of the
District of Columbia Bar.

47
<PAGE>

John C. Backus, Jr. has worked with US Order since its inception in 1990 and
has served as President and Chief Operating Officer of US Order since 1994.
Prior to joining US Order on a full time basis in 1992, Mr. Backus worked for
six years at WorldCorp holding a variety of executive positions including Vice
President of Corporate Development and Vice President of Finance at a WorldCorp
subsidiary. Prior to joining WorldCorp, Mr. Backus worked for Bain & Company,
Inc. in its consulting and venture capital group where he focused on consumer
products and services. Mr. Backus serves on the board of directors of
WorldCorp, US Order, and Visa Interactive. Mr. Backus received both his B.S.
and M.B.A. from Stanford University.

Mr. Andrew M. Paalborg joined World Airways as General Counsel in October
1989 and was elected Vice President and General Counsel of WorldCorp in May
1992. From 1984 to 1989 Mr. Paalborg practiced law with Hogan & Hartson,
McLean, Virginia. From 1982 to 1984 he was an associate with Morgan, Lewis &
Bockius, New York, New York. Mr. Paalborg received his law degree cum laude
from Georgetown University in 1982 and is a member of the New York, Virginia and
District of Columbia Bars.

Beneficial Ownership Reporting

The Company incorporates herein by reference the information required by Item
405 of Regulation S-K contained in its 1995 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION
--------------------------------

The Company incorporates herein by reference the information concerning
executive compensation contained in the 1995 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

The Company incorporates herein by reference the information concerning
security ownership of certain beneficial owners and management contained in the
1995 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

The Company incorporates herein by reference the information concerning
certain relationships and related transactions contained in the 1995 Proxy
Statement.

48
<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------

(a) The following documents are filed as part of this report:

(1) Financial Statements

The following consolidated financial statements of WorldCorp, Inc. and
subsidiaries are filed herewith:

Consolidated Balance Sheets, December 31, 1994 and 1993

Consolidated Statements of Operations, Years Ended
December 31, 1994, 1993, and 1992

Consolidated Statements of Changes in Common Stockholders'
Deficit, Years Ended December 31, 1994, 1993 and 1992

Consolidated Statements of Cash Flows, Years Ended
December 31, 1994, 1993 and 1992

Notes to Consolidated Financial Statements

Independent Auditors' Report

(2) Financial Statement Schedule

Schedule
Number
--------

II. Valuation and Qualifying Accounts

NOTE: All other schedules are omitted because the requisite information
is either presented in the financial statements or notes thereto or
is not present in amounts sufficient to require submission of the
schedules.

49
<PAGE>

(b) Reports on Form 8-K

Form 8-K, dated February 28, 1994, was filed with the Securities and
Exchange Commission on March 24, 1994.

* * * * * * * * * * * * * *

Status of Prior Documents

WorldCorp's Annual Report on Form 10-K for the year ended December 31,
1994, at the time of filing with the Securities and Exchange Commission, shall
modify and supersede all prior documents filed pursuant to Sections 13, 14, and
15(d) of the Securities Exchange Act of 1934 for purposes of any offers or sales
of any securities after the date of such filing pursuant to any Registration
Statement or Prospectus filed pursuant to the Securities Act of 1933, as
amended, which incorporates by reference such Annual Report on Form 10-K.

(3) Index to Exhibits

Exhibit
No. Exhibit
------------------------------------ ------------

3.1 Certificate of Incorporation of Incorporated
WorldCorp, Inc. dated March 16,
1987.
[Filed as Exhibit 3.1 to WorldCorp, by reference
Inc.'s Registration Statement on
Form S-4 (Commission File No.
33012735) filed on March 19, 1987
and
incorporated herein by reference.]

3.2 Amended and Restated Bylaws of Incorporated
WorldCorp, Inc. dated November 13,
1987. (Filed as Exhibit 3.1 to by reference
WorldCorp, Inc.'s Annual Report on
Form 10-K for the fiscal year ended
December 31, 1987 and
incorporated herein by reference.)

4.1 Indenture dated as of August 1, Incorporated
1987 between WorldCorp, Inc. and
Norwest Bank of Minneapolis, N.A. by reference
(Filed as Exhibit 4.1 to Amendment
No. 2 to WorldCorp, Inc.'s Form S-2
Registration Statement (Commission
File No. 33-1358276) filed August
13, 1987 and incorporated herein
by reference.]

4.2 First Supplemental Indenture dated Incorporated
as of March 1, 1988 between
WorldCorp, Inc. and Norwest Bank of by reference
Minneapolis, N.A. (Filed as
Exhibit 4.2 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the
fiscal year ended December 31, 1988
and incorporated herein by
reference.)

10.1 Warrant Agreement between Incorporated
WorldCorp, Inc. and Drexel Burnham
Lambert, Incorporated ("Drexel") by reference
dated as of June 30, 1988. (Filed
as Exhibit 10.1 to WorldCorp,
Inc.'s Form 10-Q for the quarter
ended
March 31, 1989 and incorporated
herein by reference.)

10.4 Aircraft Lease Agreement dated as Incorporated
of March 30, 1987 between World
Airways, Inc. and The Connecticut by reference
National Bank, not in its
individual capacity, but solely
as Owner Trustee. (Filed as
Exhibit 10.34 to World
Airways, Inc.'s Annual Report on
Form 10-K for the fiscal year
ended December 31, 1986 and
incorporated herein by reference.)

50
<PAGE>

Exhibit
No. Exhibit
------- -------

10.5 Merger Agreement and Plan of Incorporated
Reorganization dated as of April 28,
1987 by and among World Airways, by reference
Inc., World Merger Corporation
and WorldCorp, Inc. [Filed as
Exhibit 10.50 to WorldCorp, Inc.'s
Form S-2 Registration Statement
(Commission File No. 33-1358276)
filed on July 31, 1987 and
incorporated herein by reference.]

10.6 Assumption Agreement dated as of Incorporated
June 23, 1987 among WorldCorp,
Inc., World Airways, Inc. and T. by reference
Coleman Andrews, III. [Filed as
Exhibit 10.51 to WorldCorp, Inc.'s
Form S-2 Registration Statement
(Commission File No. 33-1358276)
filed on July 31, 1987 and
incorporated herein by reference.]

10.7 Assumption Agreement dated as of Incorporated
June 23, 1987 among WorldCorp,
Inc., World Airways, Inc. and D. by reference
Fraser Bullock. [Filed as Exhibit
10.52 to WorldCorp, Inc.'s Form S-2
Registration Statement
(Commission File No. 33-1358276)
filed on July 31, 1987 and
incorporated herein by reference.]

10.8 Guaranty and Amendment Agreement Incorporated
dated as of June 23, 1987
between WorldCorp, Inc. and The by reference
Connecticut National Bank, a
national banking association, as
Owner Trustee, with Burnham
Leasing Corporation, as Owner
Participant. [Filed as Exhibit
10.55 to WorldCorp, Inc.'s Form S-2
Registration Statement
(Commission File No. 33-1358276)
filed July 31, 1987 and
incorporated herein by reference.]

10.9 Form of Assumption Agreement dated Incorporated
as of June 23, 1987 among
WorldCorp, Inc., World Airways, Inc. by reference
and each Indemnified Party.
[Filed as Exhibit 10.60 to
WorldCorp, Inc.'s Form S-2
Registration
Statement (Commission File No.
33-1358276) filed on July 31, 1987
and incorporated herein by
reference.]

10.11 Agreement between World Airways, Incorporated
Inc. and Flight Attendants
represented by International by reference
Brotherhood of Teamsters. [Filed
reference as Exhibit 10.67 to
WorldCorp, Inc.'s Form S-3
Registration
Statement (Commission File No.
2-91998) filed on December 10, 1987
and incorporated herein by
reference.]

10.12 Agreement between World Airways, Incorporated
Inc. and Mechanics represented by
the International Brotherhood of by reference
Teamsters. (Filed as Exhibit 10.41
to WorldCorp, Inc.'s Annual Report
on Form 10-K for the fiscal year
ended December 31, 1988 and
incorporated herein by reference.)

10.13 Agreement between World Airways, Incorporated
Inc. and Stock Clerks and Store
Room Employees represented by the by reference
International Brotherhood of
Teamsters. (Filed as Exhibit
10.42 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the
fiscal year ended December 31,
1988 and incorporated herein by
reference.)

51
<PAGE>

Exhibit
No. Exhibit
------- -------

10.14 Office Lease - The Hallmark Building Incorporated
dated as of May 16, 1987 between
WorldCorp, Inc. and GT Renaissance by reference
Centre Limited Partnership. (Filed
as Exhibit 10.36 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the
fiscal year ended December 31, 1989
and incorporated herein by reference.)

10.15 Lease Amendment dated as of June 27, 1989 Incorporated
between WorldCorp, Inc. and GT
Renaissance Centre Limited Partnership. by reference
(Filed as Exhibit 10.37 to WorldCorp,
Inc.'s Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and
incorporated herein by reference.)

10.16 Office Lease - The Hallmark Building Incorporated
dated as of September 20, 1989
between World Airways, Inc. and GT by reference
Renaissance Centre Limited Partnership.
(Filed as Exhibit 10.38 to WorldCorp, Inc's
Annual Report on form 10-K for the
fiscal year ended December 31, 1989
and incorporated herein by reference.)

10.17 Warrant Agreement dated as of Incorporated
July 22, 1989 between WorldCorp, Inc.
and Charles W. Pollard. (Filed as by reference
Exhibit 10.45 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and
incorporated herein by reference.)

10.20 WorldCorp, Inc. Employee Savings and Incorporated
Stock Ownership Plan. (Filed as Exhibit
10.49 to WorldCorp, Inc.'s Annual by reference
Report on Form 10-K for the fiscal year
ended December 31, 1989 and incorporated
herein by reference.)

10.21 Amendment No. 1 to WorldCorp, Inc. Incorporated
Employee Savings and Stock
Ownership Plan. (Filed as Exhibit 10.50 by reference
to WorldCorp, Inc.'s Annual Report on
Form 10-K for the fiscal year ended
December 31, 1989 and incorporated
herein by reference.)

10.27 Aircraft Warranty Bill of Sale Incorporated
dated as of January 15, 1991 between
World Airways, Inc. and First Security by reference
Bank of Utah, N.A., not in its individual
capacity, but solely as Owner Trustee.
(Filed as Exhibit 10.46 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 and incorporated
herein by reference.)

10.28 Aircraft Lease Agreement dated as of Incorporated
January 15, 1991 between World Airways,
Inc. and First Security Bank of Utah, N.A., by reference
not in its individual capacity, but solely
as Owner Trustee. (Filed as Exhibit
10.47 to WorldCorp, Inc.'s Annual Report
on Form 10-K for the fiscal year ended
December 31, 1990 and incorporated herein
by reference.)

10.29 Loan and Security Agreement dated as of Incorporated
February 26, 1992 between WorldCorp, Inc.
and US Order Incorporated. (Filed as by reference
Exhibit 10.38 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal year
ended December 31, 1991 and incorporated
herein by reference.)

52
<PAGE>

Exhibit
No. Exhibit
------- -------

10.30 Aircraft Lease Agreement I dated as Incorporated
of February 12, 1992 between
McDonnell Douglas Finance by reference
Corporation and World Airways, Inc.
(Filed as Exhibit 10.39 to
WorldCorp, Inc.'s Annual Report on
Form 10-K for the fiscal year ended
December 31, 1991 and incorporated
herein by reference.)

10.31 Aircraft Lease Agreement II dated Incorporated
as of February 12, 1992 between
McDonnell Douglas Finance by reference
Corporation and World Airways, Inc.
(Filed as Exhibit 10.40 to
WorldCorp, Inc.'s Annual Report on
Form 10-K for the fiscal year ended
December 31, 1991 and incorporated
herein by reference.)

10.32 Aircraft Engine Purchase Agreement Incorporated
dated as of April 26, 1991 between
Terandon Leasing Corporation and by reference
World Airways, Inc. (Filed as
Exhibit 10.41 to WorldCorp, Inc.'s
Annual Report on Form 10-K for
the fiscal year ended December 31,
1991 and incorporated herein by
reference.)

10.33 Aircraft Engine Lease Agreement Incorporated
dated as of April 26, 1991 between
Terandon Leasing Corporation and by reference
World Airways, Inc. (Filed as
Exhibit 10.42 to WorldCorp, Inc.'s
Annual Report on Form 10-K for
the fiscal year ended December 31,
1991 and incorporated herein by
reference.)

10.34 Guaranty Agreement I dated as of Incorporated
February 12, 1992 between McDonnell
Douglas Finance Corporation and by reference
World Airways, Inc. (Filed as
Exhibit 10.43 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the
fiscal year ended December 31, 1991
and incorporated herein by reference.)

10.35 Guaranty Agreement II dated as of Incorporated
February 12, 1992 between McDonnell
Douglas Finance Corporation and by reference
World Airways, Inc. (Filed as
Exhibit 10.44 to WorldCorp, Inc.'s
Annual Report on Form 10-K for the
fiscal year ended December 31, 1991
and incorporated herein by reference.)

10.36 Series A Preferred Stock Purchase Incorporated
Agreement dated as of September 14,
1990 between US Order, Inc. and by reference
WorldCorp, Inc. (Filed as Exhibit
10.45 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal
year ended December 31, 1991 and
incorporated herein by reference.)

10.37 Stock Restriction Agreement dated Incorporated
as of September 14, 1990 between
WorldCorp, Inc., William F. Gorog, by reference
Jonathan M. Gorog, Peter M. Gorog,
Henry R. Nichols, William N. Melton
and John Porter. (Filed as Exhibit
10.46 to WorldCorp, Inc.'s Annual
Report on Form 10-K for the fiscal
year ended December 31, 1991 and
incorporated herein by reference.)

10.38 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48518 dated
as of September 30, 1992 between by reference
World Airways, Inc. and International
Lease Finance Corporation.

10.39 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48519 dated
as of September 30, 1992 between by reference
World Airways, Inc. and International
Lease Finance Corporation.

53
<PAGE>

Exhibit
No. Exhibit
------- -------

10.40 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48520 dated as
of September 30, 1992 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.41 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48633 dated as
of September 30, 1992 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.42 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48631 dated as
of September 30, 1992 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.43 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48632 dated as
of September 30, 1992 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.45 MD-11 Aircraft Charter Agreement Incorporated
dated as of March 18, 1993
between World Airways, Inc. and PT. by reference
Garuda Indonesia.

10.45 DC10-30 Aircraft Charter Agreement Incorporated
dated as of March 18, 1993
between World Airways, Inc. and PT. by reference
Garuda Indonesia.

10.46 Accounts Receivable Management and Incorporated
Security Agreement dated as
of December 7, 1993 between World by reference
Airways, Inc. and BNY
Financial Corporation.

10.47 Aircraft Parts Security Agreement Incorporated
dated as of December 7, 1993
between World Airways, Inc. and BNY by reference
Financial Corporation.

10.48 Warrant Certificate dated as of Incorporated
December 7, 1993 between WorldCorp,
Inc. and BNY Financial Corporation. by reference

10.50 Subscription and Preferred Stock Incorporated
Purchase Agreement dated as of
December 20, 1993 between US Order, by reference
Inc. and Knight-Ridder, Inc.

10.51 Subscription and Preferred Stock Incorporated
Purchase Agreement dated as of
December 21, 1993 between US Order, by reference
Inc. and WorldCorp, Inc.

10.52 Subscription and Preferred Stock Incorporated
Purchase Agreement dated as of
December 20, 1993 between US Order, by reference
Inc. and Jerome Kohlberg, Jr.

10.53 Subscription and Preferred Stock Incorporated
Purchase Agreement dated as of
December 21, 1993 between US Order, by reference
Inc. and Hoechst Celanese
Corporation Employee Benefit Master
Trust

10.54 Series C Preferred Stock Purchase Incorporated
Agreement dated as of December
21, 1993 between US Order, Inc. and by reference
VeriFone, Inc.

10.55 Registration Rights Agreement dated Incorporated
as of December 21, 1993
between US Order, Inc. and VeriFone, by reference
Inc.

54
<PAGE>

Exhibit
No. Exhibit
------- -------

10.57 Investment Agreement dated as Incorporated
of December 21, 1993 by and
among US Order, Inc., WorldCorp, by reference
Inc., and VeriFone, Inc.

10.58 Settlement Agreement dated as Incorporated
of February 8, 1994 between
World Airways, Inc, WorldCorp, by reference
Inc., Concord Asset Management,
Inc., Concord Leasing, Inc., and
The CIT Group.

10.59 Lease Agreement dated as of Incorporated
June 1, 1993 between World
Airways, Inc. and Mattei by reference
Corporation.

10.60 Lease Agreement dated as of Incorporated
March 30, 1993 between World
Airways, Inc. and Tinicum by reference
Properties Associates Limited
Partnership, as amended by First
Amendment to Lease dated
July 9, 1993.

10.61 Lease Agreement dated as of Incorporated
January 25, 1993 between
World Flight Crew Services, Inc. by reference
and Sakioka Farms.

10.62 Consignment Agreement dated Incorporated
as of September 30, 1993
between World Airways Inc. and by reference
The Memphis Group.

10.63 Assignment and Assumption and Incorporated
Consent and Release for
Aircraft Serial Number 47818 dated by reference
as of July 20, 1993 among World
Airways, Inc., WorldCorp, Inc.,
McDonnell Douglas Corporation, and
McDonnell Douglas Finance
Corporation.

10.64 Assignment and Assumption and Incorporated
Consent and Release for
Aircraft Serial Number 46999 dated by reference
as of July 9, 1993 among World
Airways, Inc., WorldCorp, Inc.,
McDonnell Douglas Corporation, and
McDonnell Douglas Finance
Corporation.

10.65 Aircraft Lease Agreement for Incorporated
Aircraft Serial Number 48458
dated as of January 15, 1993 by reference
between World Airways, Inc. and
Wilmington Trust Company/GATX
Capital Corporation.

10.66 Aircraft Lease Supplement for Incorporated
Aircraft Serial Number 48458
dated as of April 23, 1993 by reference
between World Airways, Inc. and
Wilmington Trust Company/GATX
Capital Corporation.

10.67 Aircraft Spare Parts Lease Incorporated
Agreement dated as of April
15, 1993 between World Airways, by reference
Inc. and GATX Capital Corporation.

10.68 Amendment No. 1 To Aircraft Incorporated
Lease Agreement for Aircraft
Serial Number 48518 dated as of by reference
November 1993 between World
Airways, Inc. and International
Lease Finance Corporation.

10.69 Amendment No. 2 to Aircraft Incorporated
Lease Agreement for Aircraft
Serial Number 48518 dated as of by reference
March 8, 1993 between World
Airways, Inc. and International
Lease Finance Corporation.

10.70 Assignment of Rights for Incorporated
Aircraft Serial Number 48518
dated as of March 8, 1993 by reference
between World Airways, Inc.
and International Lease
Finance Corporation.

55
<PAGE>

Exhibit
No. Exhibit
------- -------

10.71 Assignment of Rights for Aircraft Incorporated
Engines Serial Numbers P723942,
P723945, and P723943 dated as of by reference
March 1, 1993 between World
Airways, Inc. and International
Lease Finance Corporation.

10.72 Agency Agreement for Aircraft Serial Incorporated
Number 48518 dated as of
January 15, 1993 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.73 Amendment No. 2 to Aircraft Lease Incorporated
Agreement for Aircraft Serial
Number 48437 dated as of March 31, by reference
1993 between World Airways,
Inc. and International Lease Finance
Corporation.

10.74 Amendment No. 3 to Aircraft Lease Incorporated
Agreement for Aircraft Serial
Number 48437 dated as of April 15, by reference
1993 between World Airways,
Inc. and International Lease Finance
Corporation.

10.75 Agency Agreement for Aircraft Serial Incorporated
Number 48437 dated as of
January 15, 1993 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.76 Assignment of Rights for Aircraft Incorporated
Serial Number 48437 dated as of
April 15, 1993 between World by reference
Airways, Inc. and International Lease
Finance Corporation.

10.77 Assignment of Rights for Aircraft Incorporated
Engines Serial Numbers P723913,
P723912, and P723914 dated as of by reference
April 15, 1993 between World
Airways, Inc. and International
Lease Finance Corporation.

10.78 Amendment No. 2 to Aircraft Lease Incorporated
Agreement for Aircraft Serial
Number 48520 dated as of April 22, by reference
1993 between World Airways,
Inc. and International Lease Finance
Corporation.

10.79 Agency Agreement for Aircraft Serial Incorporated
Number 48520 dated as of
January 15, 1993 between World by reference
Airways, Inc. and International
Lease Finance Corporation.

10.80 Assignment of Rights for Aircraft Incorporated
Serial Number 48520 dated as of
April 22, 1993 between World by reference
Airways, Inc. and International Lease
Finance Corporation.

10.81 Assignment of Rights for Aircraft Incorporated
Engines Serial Numbers P723957,
P723958, and P723956 dated as of by reference
March 1, 1993 between World
Airways, Inc. and International
Lease Finance Corporation.

10.82 Aircraft Charter Agreement dated as Incorporated
of July 24, 1993 between World
Airways, Inc. and Malaysian Airline by reference
System Berhad.

10.83 Amendment No. 1 to Aircraft Lease Incorporated
Agreement for Aircraft Serial
Numbers 46835, 46837, and 46820 by reference
dated as of May 14, 1993 between
World Airways, Inc. and The
Connecticut National Bank (assigned
to Federal Express Corporation).

56
<PAGE>

Exhibit
No. Exhibit
------- -------

10.84 Amendment No. 2 to Aircraft Lease Incorporated
Agreement for Aircraft Serial
Numbers 46835, 46837, and 47820 by reference
dated as of May 14, 1993 between
World Airways, Inc. and The
Connecticut National Bank
(assigned to
Federal Express Corporation).

10.85 Return Agreement for Aircraft Incorporated
Serial Numbers 47818 and 46999
dated
as of July 9, 1993 among World by reference
Airways, Inc., WorldCorp, Inc.,
International Lease Finance
Corporation, McDonnell Douglas
Corporation, and McDonnell
Douglas Finance Corporation.

10.86/1/ Acquisition Agreement Among VISA Incorporated
International Service Association,
US Order, Inc, and WorldCorp, by reference
Inc, dated as of July 15, 1994.

10.87 Stock Purchase Agreement by and Incorporated
among World Airways, Inc.,
WorldCorp, Inc., and Malaysian by reference
Helicopter Services Berhad dated
as
of October 30, 1993.

10.88 Stock Registration Rights Incorporated
Agreement between World Airways,
Inc.
and Malaysian Helicopter Services by reference
Berhad dated as of October 30,
1993.

10.89 Shareholders Agreement between Incorporated
Malaysian Helicopter Services
Berhad and WorldCorp, Inc., and by reference
World Airways, Inc. dated as of
February 3, 1994.

10.90 Amendment No. 1 to Shareholders Incorporated
Agreement dated as of February 28,
1994, among WorldCorp, World by reference
Airways, and MHS.

10.91 Right of First Refusal Agreement Incorporated
dated as of February 28, 1994,
between US Order, Inc. ("US by reference
Order") and Technology Resources,
Inc.
Berhad ("TRI")

10.92 Amendment No. 1 dated as of Filed Herewith
August 29, 1991 to the US Order,
Inc.
Stock Restriction Agreement dated
as of September 14, 1990 among
WorldCorp, Inc., a Delaware
corporation ("WorldCorp"),
William F.
Gorog, Jonathan M. Gorog, Peter
M. Gorog, Henry R. Nichols,
William N. Melton and John Porter
(collectively, the "Founders" and
each a "Founder"), and the
Employees.

10.93 Amendment No. 2 dated as of March Filed Herewith
31, 1993 to the US Order, Inc.
Stock Restriction Agreement dated
as of September 14, 1990 among
WorldCorp, Inc., a Delaware
corporation ("WorldCorp"),
William F.
Gorog, Jonathan M. Gorog, Peter
M. Gorog, Henry R. Nichols,
William N. Melton and John Porter
(collectively, the "Founders" and
each a "Founder"), and the
Employees.

10.94 Stock Option Agreement dated as Filed Herewith
of August 1, 1994 ("Grant Date")
between WorldCorp, Inc. and
William F. Gorog.

10.95 Employment Agreement dated as of Filed Herewith
August 1, 1994 between US
Order, Inc. and John C. Backus,
Jr.

57
<PAGE>

Exhibit
No. Exhibit
------- -------

10.96 Employment Agreement dated as of Filed Herewith
August 19, 1994 between
WorldCorp, Inc. and T. Coleman
Andrews, III.

10.97 Stock Option Agreement dated as of Filed Herewith
August 19, 1994 ("Grant Date")
by and between WorldCorp, Inc. and
T. Coleman Andrews, III.

10.98 Agreement between World Airways, Filed Herewith
Inc. and the International
Brotherhood of Teamsters
representing the Cockpit
Crewmembers employed by
World Airways, Inc. dated
August 15, 1994-June 30,
1998.

10.99 Letter Employment Agreement of Filed Herewith
William F. Gorog dated
August 25, 1994.

10.100 Amendment No. 3 dated as of Filed Herewith
September 1, 1994 to the US Order,
Inc. Stock Restriction Agreement
dated as of September 14, 1990
among WorldCorp, Inc., a Delaware
corporation ("WorldCorp"), William
F. Gorog, Jonathan M. Gorog,
Peter M. Gorog, Henry R. Nichols,
William N. Melton and John Porter
(collectively, the "Founders" and
each a "Founder"), and the
Employees.

10.101 Aircraft Services Agreement dated Filed Herewith
September 26, 1994 by and between
World Airways, Inc. ("World") and
Malaysian Airline System Berhad
("MAS").

10.102 Freighter Services Agreement dated Filed Herewith
October 1, 1994 by and between
World Airways, Inc. and Malaysian
Airline System Berhad.

10.103 World Airways, Inc. 1995 AMC Filed Herewith
Contract F11626-94-D0027 dated
October 1, 1994 between World
Airways, Inc. and Air Mobility
Command.

10.104 Amendment No. 4 dated as of Filed Herewith
December 1, 1994 to the US Order,
Inc. Stock Restriction Agreement
dated as of September 14, 1990
among WorldCorp, Inc., a Delaware
corporation ("WorldCorp"), William
F. Gorog, Jonathan M. Gorog,
Peter M. Gorog, Henry R. Nichols,
William N. Melton and John Porter
(collectively, the "Founders" and
each a "Founder"), and the
Employees.

10.105 Stock Purchase Agreement (the Filed Herewith
"Agreement") dated as of December
31, 1994 by and between MHS
Berhad, a Malaysian corporation
(the "Shareholder") and WorldCorp,
Inc., a Delaware corporation (the
"Purchaser").

10.106 Promissory Note dated December 31, Filed Herewith
1994 for $8,500,000 between
WorldCorp, Inc., a Delaware
corporation ("Borrower") and
Malaysian Helicopter Services
Berhad, a Malaysian corporation
("Lender").

10.107 Amendment No. 1 to Passenger Filed Herewith
Aircraft Services and Freighter
Services Agreement dated December
31, 1994 by and between World

Airways, Inc. and Malaysian Airline System Berhad.

58
<PAGE>

Exhibit
No. Exhibit
------- -------

10.108 Amendment No. 5 dated January 2, Filed Herewith
1995 to the US Order, Inc. Stock
Restriction Agreement dated as of
September 14, 1990 among
WorldCorp, Inc., a Delaware
corporation ("WorldCorp"), William
F. Gorog, Jonathan M. Gorog, Peter
M. Gorog, Henry R. Nichols,
William N. Melton and John Porter
(collectively, the "Founders" and
each a "Founder"), and the
Employees.

10.109 Customer Agreement between Filed Herewith
WorldCorp ESSOP and Scott &
Stringfellow, Inc. dated January
11, 1995 for a margin loan.

10.110 Side Letter dated January 11, 1995 Filed Herewith
from Scott & Stringfellow, Inc. to
William F. Gorog, Trustee of
WorldCorp Employee Savings and
Stock Ownership Plan for a margin
loan to the WorldCorp ESSOP.

10.111 Guarantee Agreement dated January Filed Herewith
11, 1995 by WorldCorp, Inc.
("Guarantor") for the benefit of
Scott & Stringfellow, Inc. (the
"Lender").

10.112 Registration Rights Agreement Filed Herewith
dated as of January 11, 1995 by and
between WorldCorp, Inc. and Scott
& Stringfellow, Inc.

10.113 Side Letter dated January 11, 1995 Filed Herewith
from WorldCorp, Inc. to Scott &
Stringfellow, Inc. regarding
commitment to make contributions
to the
WorldCorp Employee Savings and
Stock Ownership Plan (the
"ESSOP"), for the duration of the
Scott & Stringfellow loan to
the ESSOP.

10.114 Strategic Alliance Agreement dated Filed Herewith
January 16, 1995 by and between
Colonial Data Technologies Corp.
and US Order.

10.115 Amendment No. 2 to Passenger Filed Herewith
Aircraft Services and Freighter
Aircraft Service Agreement dated
February 9, 1995 by and between
World Airways, Inc. and Malaysian
Airline System Berhad.

11.1 Statement on Calculation of Filed Herewith
Earnings Per Common Share.

22.1 Subsidiaries of the Registrant Filed Herewith
WorldCorp, Inc.

23.1 Consent of Independent Auditors Filed Herewith

/1/ Confidential treatment of portions of the Agreement has been
granted by the Commission. The copy filed as an exhibit omits the
information subject to confidentiality request. Confidential portions so
omitted have been filed separately with the Commission.

59
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

WORLDCORP, INC.

By /s/ T. Coleman Andrews, III
------------------------------
T. Coleman Andrews, III
Chief Executive Officer, President, and Principal
Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ T. Coleman Andrews, III Chief Executive Officer, March 31, 1995
---------------------------
(T. Coleman Andrews, III) President, and Principal
Accounting Officer

/s/ William F. Gorog Director and March 31, 1995
--------------------
(William F. Gorog) Chairman of the Board

/s/ John C. Backus, Jr. Director March 31, 1995
-----------------------
(John C. Backus, Jr.)

/s/ James E. Colburn Director March 31, 1995
--------------------
(James E. Colburn)

/s/ Patrick F. Graham Director March 31, 1995
---------------------
(Patrick F. Graham)

/s/ Juan C. O'Callahan Director March 31, 1995
----------------------
(Juan C. O'Callahan)

/s/ Geoffrey S. Rehnert Director March 31, 1995
-----------------------
(Geoffrey S. Rehnert)

60
<PAGE>

SCHEDULE II

WORLDCORP, INC. AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
For the years ended December 31, 1994, 1993 and 1992
(in thousands)

<TABLE>
<CAPTION>
Balance at Charged to Deductions Balance
beginning costs and --accounts at end of
of period expenses written off period
------------ ---------- ----------- ---------
<S> <C> <C> <C>
Allowance for Doubtful Accounts
-------------------------------
Year ended December 31, 1994 $ 311 $ 436 $ 666 $ 81
======== ======== ======= ====

Year ended December 31, 1993 $ 15 $ 309 $ 13 $ 311
======== ======== ======= ====

Year ended December 31, 1992 $ 408 $ 112 $ 505 $ 15
======== ======== ======= ====
</TABLE>

<PAGE>

Exhibit 10.92

AMENDMENT NO. 1
TO
STOCK RESTRICTION AGREEMENT

AMENDMENT NO. 1 dated as of August 29, 1991 to Stock Restriction Agreement
dated as of September 14, 1990 (the "Stock Restriction Agreement") among
WorldCorp, Inc. ("WorldCorp"), William F. Gorog, Jonathan M. Gorog, Peter M.
Gorog, Henry R. Nichols, William N. Melton and John Porter.

WITNESSETH:
-----------

WHEREAS, U.S. Order, Inc. (the "Company") is developing employee
compensation plans to enhance its ability to recruit, motivate and retain
employees.

WHEREAS, certain terms and conditions contained in the Stock Restriction
Agreement may be incompatible with the objectives of the compensation plans;

WHEREAS, the parties wish to amend certain provisions of the Stock
Restriction Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree to amend the Stock Restriction
Agreement as follows:

1. The following sentence is hereby added at the end of Section 3(b) of
the Stock Restriction Agreement:

"This Section 3(b) shall not apply to shares of Common Stock that are issued by
the Company pursuant to the exercise of stock options granted under the U.S.
Order, Inc. 1991 Stock Option Plan."

2. The following sentence is hereby added to the end of Section 4(a) of
the Stock Restriction Agreement:

"This Section 4(a) shall not apply to shares of Common Stock that are issued by
the Company pursuant to the exercise of stock options granted under the U.S.
Order, Inc. 1991 Stock Option Plan."
<PAGE>

3. The title and first sentence of Section 6 of the Stock Restriction
Agreement is hereby amended to read as follows:

"OPTION TO PURCHASE FOUNDERS' SHARES. Subject to the provisions of Section
------------------------------------
6(b) hereof, each Founder hereby grants to WorldCorp an option (the "Option")
exercisable after September 10, 1991 but prior to the Termination Date (as
defined in Section 6(e) to purchase for the price set forth in Section 6(a) all
of the outstanding shares of Common Stock held by such Founders (the "Optioned
Shares").

4. The following sentence is hereby added at the end of the first sentence
of Section 6 of the Stock Restriction Agreement:

"This Section 6 shall not apply to any shares of Common Stock that are issued by
the Company pursuant to the exercise of stock options granted under the U.S.
Order, Inc. 1991 Stock Option Plan."

5. The first sentence of Section 6(a) is hereby amended to read as
follows:

"The exercise price for the Optioned Shares (the "Exercise Price") shall be
payable in shares of WorldCorp Common Stock and shall equal (i) 400,000 shares
of Common Stock, par value $1.00, of WorldCorp as adjusted for subsequent stock
splits or dividends ("WorldCorp Common Stock") plus such additional number of
shares of WorldCorp Common Stock, if any, such that the aggregate value (based
on the then current market price of WorldCorp Common Stock) of all such shares
equals $5,000,000.

6. Section 6(a) of the Stock Restriction Agreement is hereby amended by
deleting the second and third sentences thereof.

7. Subsections (b) and (c) of Section 6 of the Stock Purchase Agreement
are hereby amended to delete the words "and Employees" from the second sentence
of Subsection (b) and the words "or Employee" in the first and second line of
Subsection (c).

8. Section 8(a) of the Stock Restriction Agreement is hereby amended by
deleting "Until the expiration of WorldCorp's option to purchase the Employees'
share of Common Stock pursuant to Section 6 hereof" and by inserting"Until the
Termination Date" in lieu thereof.

9. WorldCorp's interim partial exercises of the option described in
Section 7 of the Series A Stock Purchase Agreement dated as of September 14,
1990, between U.S. Order, Inc. And WorldCorp, Inc., as amended, will not be
deemed to be exercises for purposes of Section 3(a)(ii) of the Stock Restriction
Agreement.
<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 as
of the day and year first written above.

WORLDCORP, INC.

By: /s/ Signature Appears Here
-------------------------------------
Name:
------------------------------------
Title:
------------------------------------

/s/ William F. Gorog
__________________________________________
William F. Gorog

/s/ Jonathan M. Gorog
__________________________________________
Jonathan M. Gorog

__________________________________________
Peter M. Gorog

__________________________________________
Henry R. Nichols

__________________________________________
William N. Melton

__________________________________________
John Porter

<PAGE>

Exhibit 10.93

AMENDMENT NO. 2
TO
STOCK RESTRICTION AGREEMENT

AMENDMENT No. 2, dated as of March 31, 1993 (this "Amendment"), to the
Stock Restriction Agreement, dated as of September 14, 1990, as amended by
Amendment No. 1 thereto dated as of August 29, 1991 (the "Stock Restriction
Agreement"), by and among WorldCorp, Inc. a Delaware corporation ("WorldCorp"),
William F. Gorog, Jonathan M. Gorog, Peter M. Gorog, Henry R. Nichols, William
N. Melton and John Porter.

WHEREAS, the parties to the Stock Restriction Agreement desire to amend
certain provisions thereof.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

1. Defined Terms.
-------------

Capitalized terms used but not defined in this Amendment shall have the
meanings assigned to such terms in the Stock Restriction Agreement.

2. Amendments.
----------

(i) Section 6(a) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

(a) The exercise price for the Optioned Shares (the "Exercise Price") shall
consist of 400,000 shares of Common Stock, par value $1.00 per share, of
WorldCorp ("WorldCorp Common Stock"), plus such additional consideration, if
any, such that the aggregate value of such 400,000 shares of WorldCorp Common
Stock plus such additional consideration equals $5,000,000. Any such additional
consideration shall be payable in cash, shares of WorldCorp Common Stock or,
following a US Order IPO (as hereinafter defined), shares of Series A Preferred
Stock, or any combination of the foregoing. For purposes hereof, WorldCorp
Common Stock shall be valued based on its closing price reported on the New York
Stock
<PAGE>

Exchange Composite Transaction Reporting System on the business day prior to the
exercise of the Option, or if WorldCorp Common Stock is no longer listed on the
New York Stock Exchange, the closing price on the primary market on which
WorldCorp Common Stock is traded. For purposes hereof, Series A Preferred Stock
shall be valued by reference to the value of the shares of Common Stock into
which such Series A Preferred Stock is convertible on the business day prior to
the exercise of the Option, and Common Stock shall be valued based on its
closing price on such date on the primary market on which the Common Stock is
traded. As used herein, "US Order IPO" shall mean an underwritten initial public
offering of Common Stock pursuant to an effective registration statement under
the Securities Act of 1933, as amended.

(ii) Section 6(e) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

(e) The Option granted under this Section 6 shall terminate if notice of
exercise is not given on or prior to December 15, 1994; provided, that in the
--------
event a US Order IPO is consummated prior to September 15, 1993, then such
Option shall terminate if notice of exercise is not given on or prior to
September 15, 1993; and provided, further, that in the event a US Order IPO is
-------- -------
consummated on or after September 15, 1993 but on or prior to December 15, 1994,
then such Option shall terminate upon the earlier of (i) the thirtieth business
day following the consummation of such US Order IPO and (ii) December 15, 1994,
if notice of exercise is not given on or prior to such earlier date.

(iii) A new Section 6(f) is hereby added to the Stock Restriction
Agreement, which Section 6 (f) shall read in its entirety as follows:

(f) Notwithstanding anything in this Agreement to the contrary, in the
event that on or prior to June 30, 1993, US Order shall not have retained a
nationally recognized investment banking firm in connection with a US Order IPO,
then the number of shares of Common Stock held by the Founders which shall
constitute Option Shares for purposes of this Agreement shall be reduced by 2%
(such reduction to be made pro rata among such Founders according to their
respective holdings of Common Stock).

2
<PAGE>

3. Effect of Amendment.
-------------------

The Stock Restriction Agreement shall remain in full force and effect as
modified by this Amendment.

4. Headings.
--------

The headings contained in this Amendment are for reference purposes only,
shall not be deemed a part of this Amendment and shall not affect in any way the
meaning or interpretation of this Agreement.

5. Counterparts.
------------

This Amendment may be executed simultaneously in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the parties hereto as of the date first above written.

WORLDCORP, INC.

By: /s/ A. Scott Andrews
------------------------------------
Title: Chief Financial Officer

WILLIAM F. GOROG

/s/ William F. Gorog
__________________________________________

JONATHAN M. GOROG

/s/ Jonathan M. Gorog
__________________________________________

PETER M. GOROG

__________________________________________

3
<PAGE>

HENRY R. NICHOLS

__________________________________________

WILLIAM N. MELTON

__________________________________________

JOHN PORTER

__________________________________________

<PAGE>
EXHIBIT 10.94

WORLDCORP, INC.
1988 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

THIS AGREEMENT is made as of the 1st day of August, 1994 (the "Grant Date")
by and between WorldCorp, Inc., a Delaware corporation (the "Company"), and
William F. Gorog ("Optionee").

WITNESSETH:
-----------

RECITALS
--------

A. Optionee has been granted an Option under the WorldCorp, Inc. 1988
Stock Option Plan (the "Plan") to purchase shares of the Company's common stock.

B. The Option granted to Optionee is not intended to be an incentive stock
option under Section 422 of the Internal Revenue Code.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. Subject to the terms and conditions set forth in this
---------------
Agreement and the Plan, the Company hereby grants to Optionee, as of the Grant
Date, a Nonqualified Stock Option (the "Option") to purchase up to 250,000
shares of the Company's common stock, $1.00 par value (the "Option Shares") from
time to time during the term of the Option at an exercise price of $4.50 per
share.

2. Option Term. The Option will expire at the close of business on August
-----------
25, 2004 (the "Expiration Date"), unless sooner terminated in accordance with
the provisions of this Agreement or the Plan.

3. Option Nontransferable. The Option is not transferable or assignable
----------------------
by Optionee other than by will or by the laws of descent and distribution;
during the lifetime of Optionee, the Option shall be exercisable only by
Optionee.
<PAGE>

4. Dates of Exercise. So long as Optionee continues to serve as Chairman
-----------------
of the Board of the Company the Option will be exercisable as to the Option
Shares within the specified term of the Option and pursuant to the provisions of
this Agreement, as follows:

(a) the Option shall become exercisable as to 100,000 of the Option Shares
on the Grant Date;

(b) subject to the provisions of section (c) below, the Option shall
become exercisable as to the remaining 150,000 Option Shares on May 25, 2004;

(c) the Option as to the remaining 150,000 Option Shares shall become
exercisable prior to May 25, 2004 as to 25,000 Option Shares each time that
WorldCorp stock trades at a price that is an increase of 25% over the preceding
eligibility level for twenty trading days, in the following amounts and on the
following conditions up to a maximum of 150,000 shares:

(i) the Option as to the first 25,000 of the 150,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $5.63 each day;

(ii) the Option as to the second 25,000 of the 150,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $7.03 each day;

(iii) the Option as to the third 25,000 of the 150,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $8.79 each day;

(iv) the Option as to the fourth 25,000 of the 150,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $10.99 each day;

(v) the Option as to the fifth 25,000 of the 150,000 Option
Shares shall become exercisable on the 21st day following

2
<PAGE>

any twenty (20) trading-day period during which the Company's
stock traded at or above $13.74 each day;

(vi) the Option as to the sixth 25,000 of the 150,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $17.17 each day;

5. Termination of Employment.
-------------------------

(a) Should Optionee cease to be employed by the Company as its
Chairman of the Board (other than by reason of death, permanent disability or
termination for Cause), but (i) should Optionee be employed by an affiliate of
the Group, as defined in the Plan, in a position of equal or greater
responsibility, (ii) should Optionee continue to serve as a member of the Board
of Directors of the Company, (iii) should Optionee serve as a member of the
board of directors of World Airways, Inc., US Order, Inc., or any of the
Company's other affiliates, or (iv) should Optionee serve as the Company's
representative on the board of directors of any other entity in which the
Company has both an equity or debt investment and representation on the board of
directors of such entity, the Option will, solely to the extent that it is
exercisable immediately prior to the cessation of Optionee's employment by the
Company as Chairman of the Board, remain exercisable until the Expiration Date,
for so long as Optionee continues to serve in any of the capacities set forth in
(i) through (iv) above. In the event that Optionee ceases to serve in any of
the capacities set forth in (i) through (iv) above, the Option will, solely to
the extent that it is exercisable immediately prior to the cessation of
Optionee's service in any such capacities, remain exercisable during the one-
year period following the date of cessation of such services; provided, however,
in no event will the Option be exercisable at any time after the Expiration
Date.

(b) If Optionee incurs a disability and such disability continues for
a period of twelve (12) consecutive months and Optionee ceases by reason thereof
to be an employee of the Group, the Option will, solely to the extent that it is
exercisable immediately prior to such cessation of employee status, remain
exercisable during the one-year period following the date of such cessation of
employee status; provided however, in no event will the Option be exercisable at
any time after the Expiration Date. The term "disability" means a physical or
mental illness that will prevent Optionee from doing substantial

3
<PAGE>

gainful work for at least twelve (12) months or is likely to result in death.
If Optionee became entitled to Social Security benefits payable on account of
disability, he will be conclusively deemed to be disabled for purposes of this
Agreement.

(c) Should Optionee die while still an employee of the Group (or
during the one-year period referred to in Section 5(a)), the executors or
administrators of Optionee's estate or Optionee's heirs or legatees (as the case
may be) will have the right to exercise the Option, solely to the extent that it
is exercisable immediately prior to Optionee's death, during the one-year period
following the date of Optionee's death; provided, however, in no event will the
Option be exercisable at any time after the Expiration Date.

(d) Should Optionee be discharged for cause by the Company or any
other member of the Group, or should Optionee cease to be an employee for any
reason following receipt of notice of the intent of the Company or any other
member of the Group to discharge Optionee for cause, the term of the Option
shall immediately terminate (and the Option shall cease to be exercisable) upon
the earlier of such notice or cessation of employment. For purposes of this
Section 5(d), discharge for cause shall be as defined in Section 5(c) of the
Employment Agreement of even date herewith (the "Employment Agreement").

6. Privilege of Stock Ownership. The holder of the Option will have
----------------------------
none of the rights of a shareholder with respect to the Option Shares until such
individual has exercised the Option and has been issued a stock certificate for
the Option Shares.

7. Manner of Exercising Option. In order to exercise the Option with
---------------------------
respect to all or any part of the Option Shares for which the Option is at the
time exercisable, Optionee (or in the case of exercise after Optionee's death,
Optionee's executor, administrator, heir or legatee, as the case may be) must
take the following actions:

(i) Provide the Company written notice of such exercise in
accordance with Section 16 hereof, specifying the number of Option Shares
with respect to which the Option is being exercised;

(ii) Pay the aggregate exercise price for the purchased shares
in one or more of the following alternative

4
<PAGE>

forms: (A) full payment, in cash or by check payable to the Company's
order, in the amount of the exercise price for the Option Shares being
purchased; (B) full payment in shares of Common Stock (held for at least
six months if acquired pursuant to an option) and having a Fair Market
Value on the day of exercise (as determined under the terms of the Plan)
equal to the exercise price for the Option Shares being purchased; (C) a
combination of such shares of Common Stock and cash or check payable to the
Company's order, equal in the aggregate to the exercise price for the
Option Shares being purchased; or (D) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds to pay
the exercise price; and

(iii) Furnish the Company with appropriate documentation that
the person (or persons) exercising the Option, if other than Optionee, has
the right to exercise the Option.

8. Effect of a Change in Control.
-----------------------------

(a) In the event of the termination of Optionee's employment prior to
the Expiration Date by the Company without Cause (as defined in Section 8(c)) or
by Optionee for Good Reason (as defined in Section 8(d)) within two (2) years
after a Change in Control (as defined in Section 8(b)), the Option shall become
immediately exercisable.

(b) For purposes of this Section 8, a "Change in Control" shall be
deemed to have occurred if the conditions set forth in any one of the following
paragraphs shall have been satisfied:

(i) any Person is or becomes the Beneficial Owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act)), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person, any
securities acquired directly from the Company or any of its affiliates)
representing more than 50% of the combined voting power of the Company's
then outstanding securities; or

5
<PAGE>

(ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board and any new
director (other than a director designated by a Person who has entered into
an agreement with the Company to effect a transaction described in clause
(i), (iii) or (iv) of this Section 8(b)) whose election by the Board or
nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting securities
of the surviving entity), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any of its affiliates, at least 50% of the combined voting power
of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (B) a merger
or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person acquires more than 50% of the
combined voting power of the Company's then outstanding securities; or

(iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.

For purposes of this Section, "Person" shall have the meaning given in
Section (3)(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof; however, a Person shall not include (i) the Company or any of
its subsidiaries or affiliates, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an
offering of

6
<PAGE>

such securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

(c) "Cause" for termination by the Company of Optionee's employment
after any Change in Control shall mean (i) the willful failure to perform at the
direction of resolutions of the Board of Directors (other than any such failure
resulting from Optionee's incapacity due to physical or mental illness or any
such actual or anticipated failure after Optionee gives notice of termination of
employment for Good Reason), (ii) willful dishonesty with the intent to mislead,
or (iii) gross negligence in the performance of the services contemplated by the
Employment Agreement of even date herewith, a copy of which is attached hereto
and incorporated herein by reference as Attachment A. Optionee may only be
terminated for Cause pursuant to a resolution duly adopted by the affirmative
vote of a majority of the entire membership of the Board at a meeting of the
Board finding that, in the good faith opinion of the Board, Optionee was guilty
of conduct set forth in clause (i), (ii) or (iii) above, and specifying the
particulars thereof in detail; provided, however, that Optionee may not be
terminated for Cause unless: (1) Optionee receives prior written notice of the
Board's intention to terminate Optionee for Cause and the specific reasons
therefor, and (2) Optionee has an opportunity to be heard by the Board of
Directors and be given, if the Board deems the acts are correctable, a
reasonable opportunity to correct the act or acts (or non-action) giving rise to
such written notice.

(d) "Good Reason" for termination by Optionee of Optionee's
employment with the Company shall mean the occurrence (without Optionee's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (i), (v), (vi) or (vii) below, such act or failure to act
is corrected within ten (10) days after Optionee has notified the Board of the
occurrence of any such act or failure to act:

(i) the assignment to Optionee of any duties substantially
inconsistent with Optionee's status as an executive of the Company or a
substantial adverse alteration in the nature or status of Optionee's
responsibilities from those in effect immediately prior to the Change in
Control;

7
<PAGE>

(ii) a reduction by the Company in Optionee's annual base salary
as in effect on the date hereof or as the same may be increased from time
to time;

(iii) the Company's requiring Optionee to be based anywhere
other than either the Company's principal executive offices or Optionee's
location immediately prior to the Change in Control, except for required
travel on the Company's business to an extent substantially consistent with
Optionee's business travel obligations immediately prior to the Change in
Control;

(iv) the failure by the Company, without Optionee's consent, to
pay to Optionee any portion of Optionee's current compensation, or to pay
to Optionee any portion of an installment of deferred compensation under
any deferred compensation program of the Company, within seven (7) days of
the date such compensation is due;

(v) the failure by the Company to continue in effect any
compensation plan in which Optionee participates immediately prior to the
Change in Control which is material to Optionee's total compensation,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure
by the Company to continue Optionee's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable,
both in terms of the amount of benefits provided and the level of
Optionee's participation relative to other participants, as existed at the
time of the Change in Control;

(vi) the failure by the Company to continue to provide Optionee
with benefits substantially similar to those enjoyed by Optionee under any
of the Company's pension, life insurance, medical, health and accident, or
disability plans in which Optionee was participating at the time of the
Change in Control, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or deprive
Optionee of any material fringe benefit enjoyed by Optionee at the time of
the Change in Control, or the failure by the Company to

8
<PAGE>

provide Optionee with the number of paid vacation days to which Optionee
is entitled on the basis of years of service with the Company in accordance
with the Company's normal vacation policy in effect at the time of the
Change in Control;

(vii) any purported termination for Cause of Optionee's
employment which does not satisfy the requirements of Section 8(c); for
purposes of this Agreement, no such purported termination shall be
effective; or

(viii) the sale, liquidation or dissolution of the Company prior
to the expiration of this Agreement.

Optionee's right to terminate Optionee's employment for Good Reason
shall not be affected by Optionee's incapacity due to physical or mental
illness. Optionee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.

(e) In the event that any payment to Optionee under this paragraph is
subject to any federal or state excise tax, the Company shall pay to Optionee an
additional amount equal to any such excise tax imposed, pursuant to the terms of
the Employment Agreement.

(f) The Company shall pay to Optionee all reasonable legal fees and
expenses incurred by Optionee as a result of seeking in good faith after a
Change in Control to obtain or enforce any benefit or right provided by this
Agreement. Such payments shall be made within five (5) business days after
delivery of Optionee's written request for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require.

(g) Notwithstanding anything to the contrary set forth in this
Agreement, the provisions of this Section 8 shall not apply to Optionee if,
prior to the date on which a Change in Control (as defined in Section 8(b)
hereof) takes place: (A) this Option ceases to vest for any of the reasons set
forth in Section 5 hereof; or (B) Optionee ceases to serve in his or her
current position or ceases to serve in a position within the Group that is of
equal or greater responsibility than the position held by the Optionee as of the
Grant Date (as reasonably determined by the Committee). Otherwise, the
provisions of Section 8 hereof shall apply to Optionee.

9
<PAGE>

9. Compliance with Laws and Regulations.
------------------------------------

(a) The exercise of the Option and the issuance of Option Shares upon
such exercise is subject to compliance by the Company and Optionee with all
applicable requirements of law relating thereto and with all applicable
regulations of any stock exchange on which shares of the Company's common stock
may be listed at the time of such exercise and issuance.

(b) In connection with the exercise of the Option, Optionee will
execute and deliver to the Company such representations in writing as may be
requested by the Company so that it may comply with the applicable requirements
of federal and state securities laws.

10. Liability of the Company.
------------------------

(a) If the Option Shares exceed, as of the Grant Date, the number of
shares that may without shareholder approval be issued under the Plan, then this
Option will be void with respect to such excess shares unless shareholder
approval of an amendment sufficiently increasing the number of shares issuable
under the Plan is obtained in accordance with the provisions of the Plan.

(b) The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to the
lawful issuance and sale of any common stock pursuant to the Option will relieve
the Company of any liability with respect to the non-issuance or sale of the
common stock as to which such approval is not obtained.

11. Withholding.
-----------

(a) To the extent federal, state and local income and employment tax
withholding requirements should apply to the exercise of this Option, Optionee
hereby agrees to make appropriate arrangements with the Company for the
satisfaction of such withholding requirements.

(b) Subject to approval of the Committee, any withholding obligation
arising from exercise of the Option may be satisfied by any of the following
means or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold from the Common Stock otherwise issuable to
Optionee as the result of the exercise of the Option, a number of shares having
a Fair Market Value, as of the date the withholding tax obligation

10
<PAGE>

arises, less than or equal to the amount of the withholding tax obligation; or
(iii) delivering to the Company already owned and unencumbered shares of Common
Stock having a Fair Market Value, as of the date the withholding tax obligation
arises, less than or equal to the amount of the withholding tax obligation.

12. Other Restrictions. Upon any exercise of the Option, the
------------------
Committee may require Optionee to represent to and agree with the Company in
writing that the shares are being acquired without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer determined
by the Committee to be necessary or appropriate under applicable securities
laws.

All certificates for shares of common stock delivered pursuant to
exercise of the Option shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the common stock is then listed, and any applicable federal
or state securities law, and the Committee may cause a legend or legends to be
put on any such certificate to make appropriate reference to such restrictions.

13. Definitions. Capitalized terms not otherwise defined herein
-----------
shall have the meaning ascribed to such terms in the Plan.

14. Headings. The headings of Sections herein are included solely
--------
for convenience of reference and shall not affect the meaning or interpretation
of any of the provisions of this Agreement.

15. Notices. Any notice required to be given or delivered to the
-------
Company under the terms of this Agreement will be in writing and addressed to
the Company in care of its Secretary at 13873 Park Center Road, Suite 490,
Herndon, Virginia 22071. Any notice required to be given or delivered to
Optionee will be in writing and addressed to Optionee at the address indicated
below Optionee's signature line on this Agreement. All notices will be deemed
to have been given or delivered upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

16. Construction. This Agreement and the Option evidenced hereby are
------------
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Committee with respect to any question or issue arising under the Plan or this

11
<PAGE>

Agreement will be conclusive and binding on all persons having an interest in
the Option.

17. Governing Law. The interpretation, performance, and enforcement
-------------
of this Agreement will be governed by the laws of the State of Delaware.

IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate on its behalf by its duly authorized officer and Optionee
has also executed this Agreement in duplicate, all as of the day and year
indicated above.

WORLDCORP, INC.

By /s/ Patrick F. Graham
-------------------------------------------
Patrick F. Graham
Director

/s/ William F. Gorog
-------------------------------------------
William F. Gorog

Address: 1307 Daviswood Drive
McLean, VA 22102

<PAGE>
EXHIBIT 10.95

EMPLOYMENT AGREEMENT
--------------------

THIS EMPLOYMENT AGREEMENT dated as of August 1, 1994 ("Agreement"), is by
and between U.S. Order, Inc., a Delaware corporation ("US Order") and John C.
Backus, Jr. ("Backus").

WHEREAS, Backus has been an employee of US Order since September 20, 1990.

WHEREAS, US Order desires to continue to employ Backus as President and
Chief Operating Officer and Backus desires to continue his employment in such
capacity;

NOW, THEREFORE, US Order and Backus, in consideration of the mutual
covenants and promises contained herein, do hereby agree as follows:

1. Acceptance of Employment. Subject to the terms and conditions set forth
below, US Order agrees to employ Backus and Backus accepts such employment.

2. Term. The period of employment shall be from the date first written
above through July 31, 1997, unless further extended or sooner terminated as
hereinafter set forth. The Company and Backus agree to begin good faith
negotiations on a new employment agreement no later than July 31, 1996. If, as
of January 1, 1997 Backus and US Order have not executed a new employment
agreement, or neither party has given written notice to the other that they
intend to allow this agreement to expire at the end of its term on July 31,
1997, then and in that event, this agreement will be automatically extended for
an additional period of six (6) months through December 31, 1997, with all
economic provisions extended on a pro rata basis.

3. Position and Duties. Backus shall serve as President and Chief Operating
Officer of US Order with the duties described in US Order's By-Laws, as in
effect on the date hereof.
<PAGE>

Backus may serve on the board of directors of other companies with the prior
approval of US Order's Chairman of the Board of Directors. Backus shall devote
substantially all of his working time and attention to the business and affairs
of US Order.

4. Compensation and Related Matters.

(a) Base Salary. Backus shall receive a base salary of $250,000 per
-----------
annum payable in monthly installments in accordance with the payroll procedures
for US Order's salaried employees in effect during the term of this Agreement.

(b) Eligibility for Bonuses. Backus shall be eligible to receive an
-----------------------
annual bonus of up to 75% of his base salary in effect at the time pursuant to
US Order's officer and director incentive bonus plan as in effect on the date
hereof, a copy of which is attached as Exhibit A hereto. Backus shall be
entitled to participate in all bonus and incentive compensation plans or
arrangements hereinafter made available by US Order to its officers and
directors.

(c) Performance Stock Options. (i) Backus shall be granted options to
-------------------------
purchase US Order Common Stock, par value $0.001 per share ("Common Stock")
pursuant to US Order, Inc. 1991 Stock Option Plan (the "Plan"), as set forth in
the Stock Option Agreement between US Order and Backus of even date herewith
(the "Option Agreement"), a copy of which is attached as Exhibit B hereto. (ii)
Backus agrees to hold the following amounts of US Order Common Stock for the
balance of the term of this Agreement (and for any renewals thereof), from the
earlier to occur of, (1) Backus' exercise of options on the amount set forth
-------
below after July 31, 1995 or (2) the dates indicated below. For purposes of
this Agreement, any shares of US Order common stock owned by members of Backus'
immediate family (i.e., spouse, sons

2
<PAGE>

or daughters) shall be counted toward Backus' US Order stock ownership and
holding requirements.

<TABLE>
<CAPTION>
Options Exercised Date Required Common Stock Holdings
------------------- ------------- ------------------------------
<S> <C> <C>
100,000 April 1, 1996 10,000
200,000 April 1, 1997 15,000
300,000 April 1, 1998 20,000
</TABLE>

US Order agrees that notwithstanding any provision of the Plan to the
contrary, with respect to all options granted pursuant to this Section 4(c): (i)
"cause" for purposes of Section 8(b) of the Plan shall have the meaning set
forth in Section 5(c) of this Agreement; and (ii) for purposes of Section 4(c)
of the Option Agreement, "arms'-length sale of the Company's stock" shall
include primary issuances of Common Stock, or securities convertible into or
exchangeable for Common Stock and the exercise of any such conversion or
exchange right (and the price per share in each such case shall be the
applicable conversion or exchange price per share of Common Stock). US Order
further agrees that each option agreement with respect to options to purchase
Common Stock granted prior to the date hereof shall be amended such that the
definition of "Change in Control" for purposes of any such agreements and
options shall have the meaning assigned to such term in the Option Agreement.

(d) Business Expenses. Backus shall be entitled to reimbursement of
-----------------
business-related expenses consistent with US Order's policies in effect from
time to time.

3
<PAGE>

(e) Fringe Benefits. Backus shall be entitled to all employee
---------------
benefits made available now or in the future to other officers of US Order. In
the event this Agreement is terminated by either party for any reason other than
death or for cause, Backus may participate in US Order's health and other
benefit programs following such termination for one year for each year of
service since September 1990 (pro rated in the case of a partial year), on the
same terms available to the most senior executives of US Order or its
affiliates, or until Backus obtains comparable coverage, whichever is earlier.
US Order will maintain life insurance on Backus in the amount of $5,000,000
during the term of this Agreement, naming his estate (or any person designated
by Backus) as sole beneficiary of such insurance.

(f) Vacations. Backus shall be entitled to one (1) month of paid
---------
vacation in each calendar year. Backus shall be entitled to all paid holidays
observed by US Order.

(g) Indemnification; D&O Insurance. US Order shall provide (or cause
------------------------------
to be provided) to Backus indemnification against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlements in connection
with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including an action by or in
the right of US Order) by reason of his being or having been an officer,
director or employee of US Order or any affiliated entity, advance expenses
(including attorneys' fees) incurred by Backus in defending any such civil,
criminal, administrative or investigative action, suit or proceeding and
maintain directors' and officers' liability insurance coverage (including
coverage for securities-related claims) upon substantially the same terms and
conditions as set forth in the Indemnification Agreement dated as of August 25,
1994 between Backus and WorldCorp, Inc. (the "Indemnity Agreement").

4
<PAGE>

The provisions of this Section 4(g) shall survive termination of this
Agreement and Backus' employment hereunder.

5. Termination of Employment.
-------------------------

(a) Death. Backus' employment hereunder shall terminate upon his
-----
death, in which event US Order shall have no further obligation to Backus or his
estate with respect to compensation, other than the disposition of life
insurance and related benefits and accrued and unpaid base salary and incentive
compensation for periods prior to the date of termination.

(b) By US Order for Disability. If Backus incurs a disability and
--------------------------
such disability continues for a period of twelve (12) consecutive months, then
US Order may terminate this Agreement upon written notice to Backus, in which
event US Order shall have no obligation to Backus with respect to compensation
under Section 4(a) of this Agreement. The term "disability" means a physical or
mental illness that will prevent Backus from doing substantial gainful work for
at least twelve (12) months. If Backus became entitled to Social Security
benefits payable on account of disability, he will be conclusively deemed to be
disabled for purposes of this Agreement.

(c) By US Order for Cause. The Board of Directors of US Order may
---------------------
terminate this Agreement for Cause. "Cause" shall be defined as: (i) willful
failure to perform at the direction of the resolutions of the Board of Directors
(other than any such failure resulting from Backus' incapacity due to physical
or mental illness or any such actual or anticipated failure after Backus gives
notice of termination of employment for Good Reason (as hereinafter defined));
(ii) willful dishonesty with the intent to mislead in connection with Backus'
employment hereunder; or (iii) gross negligence in the performance of the
services contemplated

5
<PAGE>

by this Agreement. Backus may only be terminated for Cause pursuant to a
resolution duly adopted by the affirmative vote of a majority of the entire
membership of the Board at a meeting of the Board finding that, in the good
faith opinion of the Board, Backus was guilty of conduct set forth in clause
(i), (ii), or (iii) above, and specifying the particulars thereof in detail;
provided, however, that Backus may not be terminated for Cause unless: (1)
Backus receives prior written notice of US Order's intention to terminate this
Agreement for Cause and the specific reasons therefor; and (2) Backus has an
opportunity to be heard by US Order's Board of Directors and be given, if the
acts are correctable, a reasonable opportunity to correct the act or acts (or
non-action) giving rise to such written notice. If the Board by resolution duly
adopted by the affirmative vote of a majority of the entire membership of the
Board finds that Backus fails to make such correction after reasonable
opportunity to do so, this Agreement may be terminated for Cause.
---

(d) By US Order for Other Than Cause. In the event the Board of
--------------------------------
Directors terminates this Agreement for reasons other than Cause in accordance
with sub-paragraph (c) above, US Order will pay to Backus within ten (10) days
of notice of termination (or, in the case of incentive bonus compensation,
within ten (10) days of determination of amounts payable under the applicable
bonus plan generally) the undiscounted remainder of his base salary then in
effect, any deferred salary and/or bonus compensation payable, under this
Agreement. In addition, all granted but unexercisable stock options under the
Option Agreement shall become immediately exercisable and remain exercisable for
a period of one year following the date of termination. In the event that any
payment to Backus under this paragraph is subject to any federal or state excise
tax, US Order shall pay to Backus an additional amount equal to the

6
<PAGE>

excise tax imposed including additional federal and state income and excise
taxes as a result of the payments under this paragraph, and such payment will be
made when the excise tax and income taxes are due. Whether an excise tax is
payable, and the amount of the excise tax and additional income taxes payable,
shall be determined by US Order's accountants and US Order shall hold Backus
harmless for any and all taxes, penalties, and interest that may become due as a
result of the failure to properly determine that an excise tax is payable or the
correct amount of the excise tax and additional income taxes, together with all
legal and accounting fees reasonably incurred by Backus in connection with any
dispute with any taxing authority with respect to such determinations and/or
payments. In the event of a disagreement between US Order and Backus as to
whether the termination was for Cause, that issue shall be submitted within
twenty (20) days of the notice of termination to binding arbitration.

(e) By Backus. Backus may terminate his employment hereunder (for
---------
purposes of this Agreement "Good Reason") after giving at least 30 days notice
in the event that: (i) US Order relocates its general and administrative
offices or Backus' place of employment to an area other than the Washington,
D.C. Standard Metropolitan Statistical Area, (ii) he is assigned any duties
substantially inconsistent with his responsibilities as described by Section 3
hereof or a substantial adverse alteration is made to the nature or status of
such responsibilities (which for purposes of this Agreement shall be deemed to
include the removal or non-reelection of Backus to US Order's Board of Directors
unless consented to in writing by Backus), (iii) US Order reduces his annual
base salary as in effect on the date hereof or as the same may be increased form
time to time; (iv) US Order fails, without Backus' consent, to pay Backus any
portion of his current compensation, or to pay him any portion of an installment
of deferred compensation

7
<PAGE>

under any deferred compensation program of US Order, within seven (7) days of
the date such compensation is due; (v) US Order fails to continue in effect
any compensation plan in which Backus participates which is material to Backus'
total compensation, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan, or the
failure by US Order to continue Backus' participation therein (or in such
substitute or alternative Plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of Backus'
participation relative to other participants; (vi) US Order fails to continue
to provide Backus with benefits substantially similar to those enjoyed by Backus
under any of US Order's pension, life insurance, medical, health and accident,
or disability plans in which Backus was participating, US Order takes any action
which would directly or indirectly materially reduce any of such benefits or
deprive Backus of any material fringe benefit enjoyed by Backus, or US Order
fails to provide Backus with the number of paid vacation days to which Backus is
entitled hereunder; (vii) US Order terminates, or proposes to terminate Backus'
employment hereunder contrary to the requirements of Section 5(c) hereof (for
purposes of this Agreement, no such termination or purported termination shall
be effective); (viii) a Change in Control (as defined in the Option Agreement)
occurs; (ix) the Board determines that US Order should be sold, liquidated or
dissolved or all or substantially all of assets sold prior to the end of this
Agreement. In the event that Backus decides to terminate this Agreement and his
employment with US Order or any successor in interest in accordance with the
provisions of this section, he shall receive the undiscounted remainder of his
base salary then in effect, and any deferred salary and/or bonus compensation
payable under this Agreement. In addition, all granted but unvested stock
options under the Option Agreement

8
<PAGE>

shall become immediately exercisable and remain exercisable for a period of one
year following the date of termination. Any other payments due or actions
required under this paragraph shall be made within 10 days of termination of the
Agreement (or, in the case of incentive bonus compensation, within ten (10) days
of determination or amounts payable under the applicable bonus plan generally).

In the event that any payment to Backus under this paragraph is subject to
any federal or state excise tax, US Order shall pay to Backus an additional
amount equal to the excise tax imposed including additional federal and state
income and excise taxes as a result of the payments under this paragraph, and
such payment will be made when the excise tax and income taxes are due. Whether
an excise tax is payable, and the amount of the excise tax and additional income
taxes payable, shall be determined by US Order's accountants and US Order shall
hold Backus harmless for any and all taxes, penalties, and interest that may
become due as a result of the failure to properly determine that an excise tax
is payable or the correct amount of the excise tax and additional income taxes,
together with all legal and accounting fees reasonably incurred by Backus in
connection with any dispute with any taxing authority with respect to such
determinations and/or payments. In the event of a disagreement between US Order
and Backus as to whether the termination was for Good Reason, that issue shall
be submitted within twenty (20) days of the notice of termination to binding
arbitration.

(f) Notice of Termination. Termination of this Agreement by US Order
---------------------
or termination of this Agreement by Backus shall be communicated by written
notice to the other party hereto, specifically indicating the termination
provision relied upon.

6. Beneficiary. The Beneficiary of any payment to be made in the event of
-----------
Backus'

9
<PAGE>

death shall be his wife, or such other person or persons as Backus shall
designate in writing to US Order. If no beneficiary shall survive Backus, any
such payments shall be made to his estate.

7. Arbitration. Any dispute or controversy arising under or in
-----------
connection with this Agreement shall be settled exclusively by arbitration,
under the commercial arbitration rules of the American Arbitration Association.

8. No Waiver. The failure of either party at any time to enforce any
---------
provisions of this Agreement or to exercise any remedy, option, right, power or
privilege provided for herein, or to require the performance by the other party
of any of the provisions hereof, shall in no way be deemed a waiver of such
provision at the same or at any prior to subsequent time.

9. Governing Law. This Agreement is governed by and shall be construed in
-------------
accordance with the laws of the State of Virginia. Backus agrees to submit to
personal jurisdiction in the State of Virginia.

10. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this Agreement shall not be deemed to affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.

11. Successors. This Agreement shall be binding upon US Order, its
----------
successors and assigns, including any corporation or other business entity which
may acquire all or substantially all of US Order's assets or business, or within
which US Order may be consolidated or merged, or any surviving corporation in a
merger involving US Order.

12. Waiver of Modification of Agreement. No waiver or modification of
-----------------------------------
this Agreement shall be valid unless in writing and duly executed by both
parties.

10
<PAGE>

13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which together will constitute one and the same
instrument.

14. Controlling Agreement. In the event of any inconsistency or conflict
---------------------
between the provisions of this Agreement and any term or provision of the Option
Agreement or Plan, the provisions of this Agreement shall govern and supersede
such conflicting or inconsistent provision. US Order agrees to cause the Plan
to be amended as may be required to eliminate any such conflict or
inconsistency.

IN WITNESS WHEREOF, parties have executed this Agreement as of the date and
year first above written.
US ORDER, INC.

By: /s/ William F. Gorog
--------------------------------------
William F. Gorog
Chairman of the Board

/s/ John C. Backus, Jr.
--------------------------------------
John C. Backus, Jr.
President and Chief Operating Officer

Address: 9085 Eaton Park Road
Great Falls, VA 22066

<PAGE>

EMPLOYMENT AGREEMENT
--------------------

THIS EMPLOYMENT AGREEMENT dated as of August 19, 1994 ("Agreement"), is by
and between WorldCorp, a Delaware corporation, its successors and assigns
(hereinafter "WorldCorp") and T. Coleman Andrews, III ("Andrews").

WHEREAS, Andrews has served as WorldCorp's Chief Executive Officer and
President since June 15, 1987, at which time the newly formed WorldCorp assumed
Andrews' Employment Agreement with World Airways, Inc., dated August 25, 1986.
Andrews and WorldCorp entered into a new Employment Agreement on November 10,
1988, which was extended pursuant to the terms of that Agreement to August 31,
1995.

WHEREAS, WorldCorp desires to continue to employ Andrews and Andrews
desires to continue to serve WorldCorp as Chief Executive Officer and President;

NOW, THEREFORE, WorldCorp and Andrews, in consideration of the mutual
covenants and promises contained herein, do hereby agree as follows:

1. Acceptance of Employment. Subject to the terms and conditions set
------------------------
forth below, WorldCorp agrees to employ Andrews and Andrews accepts such
employment.

2. Term. The period of employment shall be from the date first written
----
above through December 31, 1997, unless further extended or sooner terminated as
hereinafter set forth. If, as of December 31, 1996, Andrews and WorldCorp have
not executed a new employment agreement, or neither party has given written
notice to the other that they intend to allow this agreement to expire at the
end of its term on December 31, 1997, then and in that event, this agreement
will be automatically extended for eighteen (18) months through June 30, 1998,
with all economic provisions extended on a pro rata basis.
<PAGE>

3. Position and Duties. Andrews shall continue to serve as Chief
-------------------
Executive Officer and President of WorldCorp with the duties described in
Article V, Section 8 of WorldCorp's By-Laws, as in effect on the date hereof.
Andrews shall continue to serve as a Director of WorldCorp. Andrews may serve
on the board of directors of other companies with the prior approval of
WorldCorp's Chairman or Board of Directors. Andrews shall devote substantially
all of his working time and attention to the business and affairs of WorldCorp.

4. Compensation and Related Matters.
--------------------------------

(a) Base Salary. Andrews shall receive a minimum salary of $350,000 per
-----------
annum payable in monthly installments in accordance with the payroll procedures
for WorldCorp's salaried employees in effect during the term of this Agreement.

(b) Eligibility for Bonuses. Andrews shall be eligible to receive an
-----------------------
annual bonus pursuant to WorldCorp's officer incentive bonus plan.

(c) Performance Stock Options. (i) Andrews shall be granted options to
-------------------------
purchase WorldCorp Common Stock pursuant to the Amended and Restated Stock
Option Plan (as amended and restated on August 19, 1994), as set forth in the
Stock Option Agreement of even date herewith, a copy of which is attached hereto
and incorporated herein by reference.

(ii) Andrews agrees to hold the following amounts of WorldCorp common stock
for the balance of the term of this Agreement (and for any renewals thereof),
from the earlier to occur of: (1) Andrews' exercise of options in the amounts
-------
set forth below or (2) the dates indicated below. For purposes of this
Agreement, any shares of WorldCorp common stock owned by members of Andrews'
immediate family (i.e., spouse, sons or daughters) shall be counted toward
Andrews' WorldCorp stock ownership and holding requirements.

2
<PAGE>

<TABLE>
Required
Options Exercised Date Common Stock holdings
----------------- ---- ---------------------
<C> <S> <C>
300,000 April 1, 1995 20,000
400,000 April 1, 1996 30,000
500,000 April 1, 1997 40,000
600,000 -------------- 50,000
700,000 -------------- 60,000
800,000 -------------- 70,000
</TABLE>

(d) Business Expenses. Andrews shall be entitled to reimbursement of
-----------------
business-related expenses consistent with WorldCorp's policies.

(e) Fringe Benefits. Andrews shall be entitled to all employee benefits
---------------
made available now or in the future to other officers of WorldCorp. In the
event this Agreement is terminated by either party for any reason other than
death or for cause, Andrews may participate in WorldCorp's health and other
benefit programs for one year for each year of service as Chief Executive
Officer since August 1986, on the same terms available to the most senior
executives of WorldCorp or its affiliates, or until Andrews obtains comparable
coverage, whichever is earlier. WorldCorp will maintain key-man insurance on
Andrews in the amount of $5,000,000 during the term of this Agreement. In the
event of Andrews' death, WorldCorp shall be required to use the proceeds to
purchase some or all of the stock options and/or common shares then owned by
Andrews at a price determined by the formula set forth in Appendix A.

(f) Vacations. Andrews shall be entitled to one (1) month of paid vacation
---------
in each calendar year. Andrews shall be entitled to all paid holidays observed
by WorldCorp.

5. Termination of Employment.
-------------------------

(a) Death. Andrews' employment hereunder shall terminate upon his death,
-----
in which event WorldCorp shall have no further obligation to Andrews or his
estate with respect

3
<PAGE>

to compensation, other than the disposition of life insurance and related
benefits.

(b) By WorldCorp for Disability. If Andrews incurs a disability and such
---------------------------
disability continues for a period of twelve (12) consecutive months, then
WorldCorp may terminate this Agreement upon written notice to Andrews, in which
event WorldCorp shall have no obligation to Andrews with respect to compensation
under Section 4(a) of this Agreement. The term "disability" means a physical or
mental illness that will prevent Andrews from doing substantial gainful work for
at least twelve months or is likely to result in death. If Andrews became
entitled to Social Security benefits payable on account of disability, he will
be conclusively deemed to be disabled for purposes of this Agreement.

(c) By WorldCorp for Cause. The Board of Directors of WorldCorp may
----------------------
terminate this Agreement for Cause. "Cause" shall be defined as: (i) willful
failure to perform at the direction of the resolutions of the Board of Directors
(other than any such failure resulting from Andrews' incapacity due to physical
or mental illness or any such actual or anticipated failure after Andrews gives
notice of termination of employment for Good Reason (as hereinafter defined)) ;
(ii) willful dishonesty with the intent to mislead; or (iii) gross negligence in
the performance of the services contemplated by this Agreement. Andrews may
only be terminated for Cause pursuant to a resolution duly adopted by the
affirmative vote of a majority of the entire membership of the Board at a
meeting of the Board finding that, in the good faith opinion of the Board,
Andrews was guilty of conduct set forth in clause (i), (ii), or (iii) above, and
specifying the particulars thereof in detail; provided, however, that Andrews
may not be terminated for Cause unless: (i) Andrews receives prior written
notice of WorldCorp's intention to terminate this Agreement for Cause and the
specific reasons therefor; and (2) Andrews has

4
<PAGE>

an opportunity to be heard by WorldCorp's Board of Directors and be given, if
the Board deems the acts are correctable, a reasonable opportunity to correct
the act or acts (or non-action) giving rise to such written notice. If Andrews
fails to make such correction, this Agreement shall be terminated.

(d) By WorldCorp for Other Than Cause. In the event the Board of Directors
---------------------------------
terminates this Agreement for reasons other than causes as defined in sub-
paragraph (c) above, WorldCorp will pay to Andrews within ten (10) days of
notice of termination the undiscounted remainder of his base salary, including
deferred salary and/or bonus compensation, under this Agreement, as well as all
granted but unvested stock options under the Stock Option Agreement of even date
herewith between WorldCorp and Andrews, which such options shall become
immediately exercisable. In the event that any payment to Andrews under this
paragraph is subject to any federal or state excise tax, WorldCorp shall pay to
Andrews an additional amount equal to the excise tax imposed including
additional federal and state income and excise taxes as a result of the payments
under this paragraph, and such payment will be made when the excise tax and
income taxes are due. Whether an excise tax is payable, and the amount of the
excise tax and additional income taxes payable, shall be determined by
WorldCorp's accountants and WorldCorp shall hold Andrews harmless for any and
all taxes, penalties, and interest that may become due as a result of the
failure to properly determine that an excise tax is payable or the correct
amount of the excise tax and additional income taxes. In the event of a
disagreement between WorldCorp and Andrews as to whether the termination was for
cause, that issue shall be submitted within twenty (20) days of the notice of
termination to binding arbitration.

5
<PAGE>

(e) By Andrews. Andrews may terminate his employment hereunder (for
----------
purposes of this Agreement "Good Reason") after giving at least 30 days notice
in the event that: (i) WorldCorp relocates its general and administrative
offices or Andrews' place of employment to an area other than Washington, D.C.,
Standard Metropolitan Statistical Areas, (ii) he is assigned any duties
substantially inconsistent with his responsibilities as described by Section 3
hereof or a substantial adverse alteration is made to the nature or status of
such responsibilities, (iii) WorldCorp reduces his annual base salary as in
effect on the date hereof or as the same may be increased from time to time;
(iv) WorldCorp fails, without Andrews' consent, to pay Andrews any portion of
his current compensation, or to pay him any portion of an installment of
deferred compensation under any deferred compensation program of WorldCorp,
within seven (7) days of the date such compensation is due; (v) WorldCorp fails
to continue in effect any compensation plan in which Andrews participates which
is material to Andrews' total compensation, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by WorldCorp to continue Andrews'
participation therein (or in such substitute or alternative Plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided and
the level of Andrews' participation relative to other participants; (vi)
WorldCorp fails to continue to provide Andrews with benefits substantially
similar to those enjoyed by Andrews under any of WorldCorp's pension, life
insurance, medical, health and accident, or disability plans on which Andrews
was participating, WorldCorp takes any action which would directly or indirectly
materially reduce any of such benefits or deprive Andrews of any material fringe
benefit enjoyed by Andrews, or WorldCorp fails to provide Andrews with the
number of paid vacation days to which Andrews

6
<PAGE>

is entitled hereunder; (vii) WorldCorp terminates, or proposes to terminate
Andrews' employment hereunder contrary to the requirements of Section 5(c)
hereof (for purposes of this Agreement, no such termination of purported
termination shall be effective); or (viii) the Board determines that WorldCorp
should be sold, liquidated or dissolved prior to the end of this Agreement. In
the event that Andrews decides to terminate this Agreement and his employment
with WorldCorp or any successor in interest in accordance with the provisions of
this section, he shall receive the undiscounted remainder of his base salary,
including deferred salary and/or bonus compensation, under this Agreement as
well as all granted but unvested stock options under the Stock Option Agreement
of even date herewith between WorldCorp and Andrews, which such options shall
become immediately exercisable. Any other payments due or actions required
under this paragraph shall be made within 10 days of termination of the
Agreement.

In the event that any payment to Andrews under this paragraph is subject to
any federal or state excise tax, WorldCorp shall pay to Andrews an additional
amount equal to the excise tax imposed including additional federal and state
income and excise taxes as a result of the payments under this paragraph, and
such payment will be made when the excise tax and income taxes are due. Whether
an excise tax is payable, and the amount of the excise tax and additional income
taxes payable, shall be determined by WorldCorp's accountants and WorldCorp
shall hold Andrews harmless for any and all taxes, penalties, and interest that
may become due as a result of the failure to properly determine that an excise
tax is payable or the correct amount of the excise tax and additional income
taxes. In the event of a disagreement between WorldCorp and Andrews as to
whether the termination was for cause, that issue shall be submitted within
twenty (20) days of the notice of termination to binding arbitration.

7
<PAGE>

(f) Notice of Termination. Termination of this Agreement by WorldCorp or
---------------------
termination of this Agreement by Andrews shall be communicated by written notice
to the other party hereto, specifically indicating the termination provision
relied upon.

6. Beneficiary. The Beneficiary of any payment to be made in the event of
-----------
Andrew's death shall be his wife, or such other person or persons as Andrews
shall designate in writing to WorldCorp. If no beneficiary shall survive
Andrews, any such payments shall be made to his estate.

7. Arbitration. Any dispute or controversy arising under or in connection
-----------
with this Agreement shall be settled exclusively by arbitration, under the rules
of the American Arbitration Association.

9. Governing Law. This Agreement is governed by and shall be construed in
-------------
accordance with the laws of the State of Virginia. Andrews agrees to submit to
personal jurisdiction in the State of Virginia.

11. Successors. This Agreement shall be binding upon WorldCorp, its
----------
successors and assigns, including any corporation or other business entity which
may acquire all or substantially

8
<PAGE>

all of WorldCorp's assets or business, or within which WorldCorp may be
consolidated or merged, or any surviving corporation in a merger involving
WorldCorp.

12. Waiver or Modification of Agreement. No waiver or modification of
-----------------------------------
this Agreement shall be valid unless in writing and duly executed by both
parties.

13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which together will constitute one and the same
instrument.

IN WITNESS WHEREOF, parties have executed this Agreement as of the date and
year first above written.

WORLDCORP, INC.

By: /s/ William F. Gorog
------------------------------
William F. Gorog
Chairman of the Board

/s/ T. Coleman Andrews, III
---------------------------------
T. Coleman Andrews, III

<PAGE>
EXHIBIT 10.97

WORLDCORP, INC.
AMENDED AND RESTATED 1988 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

THIS AGREEMENT is made as of the 19th day of August, 1994 (the "Grant
Date") by and between WorldCorp, Inc. a Delaware corporation (the "Company"),
and T. Coleman Andrews, III ("Optionee").

WITNESSETH:
-----------

RECITALS
--------

A. Optionee has been granted an Option under the WorldCorp, Inc. Amended
and Restated 1988 Stock Option Plan (the "Plan") to purchase shares of the
Company's common stock.

B. The Option granted to Optionee is not intended to be an incentive stock
option under Section 422 of the Internal Revenue Code.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. Subject to the terms and conditions set forth in this
---------------
Agreement and the Plan, the Company hereby grants to Optionee, as of the Grant
Date, a Nonqualified Stock Option (the "Option") to purchase up to 800,000
shares of the Company's common stock, $1.00 par value (the "Option Shares") from
time to time during the term of the Option at an exercise price of $4.50 per
share.

2. Option Term. The Option will expire at the close of business on August
-----------
19, 2004 (the "Expiration Date"), unless sooner terminated in accordance with
the provisions of this Agreement or the Plan.

4. Dates of Exercise. So long as Optionee continues to serve as Chief
-----------------
Executive Officer and President of the Company the Option will be
<PAGE>

exercisable as to the Option Shares within the specified term of the Option and
pursuant to the provisions of this Agreement, as follows:

(a) the Option shall become exercisable as to 200,0000 of the
Option Shares on the Grant Date;

(b) subject to the provisions of section (c) below, the Option
shall become exercisable as to the remaining 600,000 Option Shares on May 21,
2004;

(c) the Option as to the remaining 600,000 Option Shares shall
become exercisable prior to May 21, 2004 as to 100,000 Option Shares each time
that WorldCorp stock trades at a price that is an increase of 25% over the
preceding eligibility level for twenty trading days, in the following amounts
and on the following conditions up to a maximum of 600,000 shares:

(i) the Option as to the first 100,000 of the 600,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $5.63 each day;

(ii) the Option as to the second 100,000 of the 600,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $7.03 each day;

(iii) the Option as to the third 100,000 of the 600,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $8.79 each day;

(iv) the Option as to the fourth 100,000 of the 600,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $10.99 each day;

(v) the Option as to the fifth 100,000 of the 600,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $13.74 each day;

2
<PAGE>

(vi) the Option as to the sixth 100,000 of the 600,000 Option
Shares shall become exercisable on the 21st day following any
twenty (20) trading-day period during which the Company's stock
traded at or above $17.17 each day;

5. Termination of Employment.
-------------------------

(a) Should Optionee cease to be employed by the Company as its
Chief Executive Officer and President (other than by reason of death, permanent
disability or termination for Cause), but (i) should Optionee be employed by an
affiliate of the Group, as defined in the Plan, in a position of equal or
greater responsibility, (ii) should Optionee continue to serve as a member of
the Board of Directors of the Company, (iii) should Optionee serve as a member
of the board of directors of World Airways, Inc., US Order, Inc., or any of the
Company's other affiliates, or (iv) should Optionee serve as the Company's
representative on the board of directors of any other entity in which the
Company has both an equity or debt investment and representation on the board of
directors of such entity, the Option will, solely to the extent that it is
exercisable immediately prior to the cessation of Optionee's employment by the
Company as Chief Executive Officer and President, remain exercisable until the
Expiration Date, for so long as Optionee continues to serve in any of the
capacities set forth in (i) through (iv) above. In the event that Optionee
ceases to serve in any of the capacities set forth in (i) through (iv) above,
the Option will, solely to the extent that it is exercisable immediately prior
to the cessation of Optionee's service in any such capacities, remain
exercisable during the one-year period following the date of cessation of such
services; provided, however, in no event will the Option be exercisable at any
time after the Expiration Date.

(b) If Optionee incurs a disability and such disability
continues for a period of twelve (12) consecutive months and Optionee ceases by
reason thereof to be an employee of the Group, the Option will, solely to the
extent that it is exercisable immediately prior to such cessation of employee
status, remain exercisable during the one-year period following the date of such
cessation of employee status; provided however, in no event will the Option be
exercisable at any time after the Expiration Date. The term "disability" means a
physical or mental illness that will prevent Optionee from doing substantial
gainful work for at least twelve (12) months or is likely to result in death. If
Optionee became entitled to Social Security benefits payable on account of
disability, he will be conclusively deemed to be disabled for purposes of this
Agreement.

3
<PAGE>

(d) Should Optionee be discharged for cause by the Company or
any other member of the Group, or should Optionee cease to be an employee for
any reason following receipt of notice of the intent of the Company or any other
member of the Group to discharge Optionee for cause, the term of the Option
shall immediately terminate (and the Option shall cease to be exercisable) upon
the earlier of such notice or cessation of employment. For purposes of this
Section 5(d), discharge for cause shall be as defined in Section 5(c) of the
Employment Agreement of even date herewith (the "Employment Agreement").

(i) Provide the Company written notice of such exercise in
accordance with Section 16 hereof, specifying the number of Option Shares
with respect to which the Option is being exercised;

(ii) Pay the aggregate exercise price for the purchased shares
in one or more of the following alternative forms: (A) full payment, in
cash or by check payable to the Company's order, in the amount of the
exercise price for the Option Shares being purchased; (B) full payment in
shares of Common Stock (held for at least six months if acquired pursuant
to an option) and having a Fair Market Value on the day of exercise

4
<PAGE>

(as determined under the terms of the Plan) equal to the exercise price for
the Option Shares being purchased; (C) a combination of such shares of
Common Stock and cash or check payable to the Company's order, equal in the
aggregate to the exercise price for the Option Shares being purchased; or
(D) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price; and

(iii) Furnish the Company with appropriate documentation that
the person (or persons) exercising the Option, if other than Optionee, has
the right to exercise the Option.

8. Effect of a Change in Control.
-----------------------------

(a) In the event of the termination of Optionee's employment
prior to the Expiration Date by the Company without Cause (as defined in Section
8(c)) or by Optionee for Good Reason (as defined in Section 8(d)) within two (2)
years after a Change in Control (as defined in Section 8(b)), the Option shall
become immediately exercisable.

(b) For purposes of this Section 8, a "Change in Control" shall
be deemed to have occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:

5
<PAGE>

of this Section 8(b)) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority thereof; or

(c) "Cause" for termination by the Company of Optionee's
employment after any Change in Control shall mean (i) the willful failure to

6
<PAGE>

perform at the direction of resolutions of the Board of Directors (other than
any such failure resulting from Optionee's incapacity due to physical or mental
illness or any such actual or anticipated failure after Optionee gives notice of
termination of employment for Good Reason), (ii) willful dishonesty with the
intent to mislead, or (iii) gross negligence in the performance of the services
contemplated by the Employment Agreement of even date herewith, a copy of which
is attached hereto and incorporated herein by reference as Attachment A.
Optionee may only be terminated for Cause pursuant to a resolution duly adopted
by the affirmative vote of a majority of the entire membership of the Board at a
meeting of the Board finding that, in the good faith opinion of the Board,
Optionee was guilty of conduct set forth in clause (i), (ii) or (iii) above, and
specifying the particulars thereof in detail; provided, however, that Optionee
may not be terminated for Cause unless: (1) Optionee receives prior written
notice of the Board's intention to terminate Optionee for Cause and the specific
reasons therefor, and (2) Optionee has an opportunity to be heard by the Board
of Directors and be given, if the Board deems the acts are correctable, a
reasonable opportunity to correct the act or acts (or non-action) giving rise to
such written notice.

(ii) a reduction by the Company in Optionee's annual base
salary as in effect on the date hereof or as the same may be increased from
time to time;

(iii) the Company's requiring Optionee to be based anywhere
other than either the Company's principal executive offices or Optionee's
location immediately prior to the

7
<PAGE>

Change in Control, except for required travel on the Company's business to
an extent substantially consistent with Optionee's business travel
obligations immediately prior to the Change in Control;

(vii) any purported termination for Cause of Optionee's
employment which does not satisfy the requirements

8
<PAGE>

of Section 8(c); for purposes of this Agreement, no such purported
termination shall be effective; or

(viii) the sale, liquidation or dissolution of the Company prior
to the expiration of this Agreement.

(e) In the event that any payment to Optionee under this
paragraph is subject to any federal or state excise tax, the Company shall pay
to Optionee an additional amount equal to any such excise tax imposed, pursuant
to the terms of the Employment Agreement.

(f) The Company shall pay to Optionee all reasonable legal fees
and expenses incurred by Optionee as a result of seeking in good faith after a
Change in Control to obtain or enforce any benefit or right provided by this
Agreement. Such payments shall be made within five (5) business days after
delivery of Optionee's written request for payment accompanied with such
evidence of fees and expenses incurred as the Company reasonably may require.

9. Compliance with Laws and Regulations.
------------------------------------

9
<PAGE>

regulations of any stock exchange on which shares of the Company's common stock
may be listed at the time of such exercise and issuance.

10. Liability of the Company.
------------------------

(a) If the Option Shares exceed, as of the Grant Date, the
number of shares that may without shareholder approval be issued under the Plan,
then this Option will be void with respect to such excess shares unless
shareholder approval of an amendment sufficiently increasing the number of
shares issuable under the Plan is obtained in accordance with the provisions of
the Plan.

11. No Employment Contract. Except to the extent provided in the
----------------------
Employment Agreement, neither the Company nor any of its subsidiaries is under
any obligation to continue the employment of Optionee for any period of specific
duration.

12. Withholding.
-----------

(a) To the extent federal, state and local income and employ-
ment tax withholding requirements should apply to the exercise of this Option,
Optionee hereby agrees to make appropriate arrangements with the Company for the
satisfaction of such withholding requirements.

(b) Subject to approval of the Committee, any withholding
obligation arising from exercise of the Option may be satisfied by any of the
following means or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold from the Common Stock otherwise
issuable to Optionee as the result of the exercise of the Option, a number of
shares having a Fair Market Value, as of the date the withholding tax obligation

10
<PAGE>

13. Other Restrictions. Upon any exercise of the Option, the
------------------
Committee may require Optionee to represent to and agree with the Company in
writing that the shares are being acquired without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer determined
by the Committee to be necessary or appropriate under applicable securities
laws.

14. Definitions. Capitalized terms not otherwise defined herein
-----------
shall have the meaning ascribed to such terms in the Plan.

15. Headings. The headings of Sections herein are included solely
--------
for convenience of reference and shall not affect the meaning or interpretation
of any of the provisions of this Agreement.

16. Notices. Any notice required to be given or delivered to the
-------
Company under the terms of this Agreement will be in writing and addressed to
the Company in care of its Secretary at 13873 Park Center Road, Suite 490,
Herndon, Virginia 22071. Any notice required to be given or delivered to
Optionee will be in writing and addressed to Optionee at the address indicated
below Optionee's signature line on this Agreement. All notices will be deemed
to have been given or delivered upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

17. Construction. This Agreement and the Option evidenced hereby are
------------
made and granted pursuant to the Plan and are in all respects limited by and
subject to the express terms and provisions of the Plan. All decisions of the
Committee with respect to any question or issue arising under the Plan or this

11
<PAGE>

Agreement will be conclusive and binding on all persons having an interest in
the Option.

18. Governing Law. The interpretation, performance, and enforcement
-------------
of this Agreement will be governed by the laws of the State of Delaware.

WORLDCORP, Inc.

By /s/ William F. Gorog
-------------------------
William F. Gorog
Chairman

/s/ T. Coleman Andrews, III
---------------------------
T. Coleman Andrews, III
Address: 6720 Wemberly Way
McLean, VA

<PAGE>

EXHIBIT 10.98

AGREEMENT

between

WORLD AIRWAYS, INC.

and the

INTERNATIONAL BROTHERHOOD
OF TEAMSTERS

representing the

COCKPIT CREWMEMBERS

employed by

WORLD AIRWAYS, INC.

August 15, 1994 - June 30, 1998
<PAGE>

[INTENTIONALLY LEFT BLANK]

2
<PAGE>

TABLE OF CONTENTS
-----------------
Article Page
------- ----

Agreement 5
Article I Recognition 6
Article II Definitions 15
Article III Compensation 22
Article IV Per Diem 36
Article V Foreign Service 40
Article VI Moving Expenses 42
Article VII Vacations 49
Article VIII Sick Leave 58
Article IX Leaves of Absence 63
Article X Seniority 69
Article XI Reduction, Furlough, Recall 78
Article XII Filling of Vacancies 90
Article XIII Training and Upgrading 106
Article XIV Scheduling 122
Article XV Hours of Service 137
Article XVI Physical Examination 148
Article XVII Uniforms 151
Article XVIII Union Security 153
Article XIX Union Representation 157
Article XX Management 158
Article XXI No Strike-No Lockout 161
Article XXII Grievance Procedure 163
Article XXIII Arbitration 167
Article XXIV Insurance 172
Article XXV Internment, Prisoner or Hostage 178
Article XXVI Retirement Plans 180
Article XXVII Severance Pay 182
Article XXVIII General Conditions 185
Article XXIX Travel Policy 196
Article XXX Management Crewmembers 197
Article XXXI Subsidiary Operations 203
Article XXXII Basing and Commuting 206
Article XXXIII Duration 207
Signature Page 208
F/E Prior Rights Clause 209

3
<PAGE>

App. A F/E's Seniority List 215
App. B F/E letter 216

Letters of Agreement 217
----------------

Effective Contract Dates 218
Retroactivity Payments 219
Retroactivity Pay and Profit Sharing Bonus Plan 221
MD-11 Lump Sum Pay 233

4
<PAGE>

AGREEMENT

THIS AGREEMENT concerning the cockpit Crewmembers in the service of WORLD
AIRWAYS, INC. entered into by and between WORLD AlRWAYS, INC., hereinafter
referred to as "Company" and the INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
hereinafter referred to as "Union", pursuant to the terms of the Railway Labor
Act, as amended, in the mutual interests of the Crewmembers and of the Company
to promote the safety and efficiency and economy of operations, to provide for
orderly collective bargaining relations between the Company and the Union and a
method for the prompt and equitable disposition of grievances, and a method for
the establishment of fair wages, hours and working conditions for the
Crewmembers covered hereunder. In making this Agreement it is recognized to be
the duty of the Union, the Crewmembers and the Company to cooperate fully for
the advancement of the purposes of this Agreement.

ARTICLE I

Scope, Recognition, Acquisition, and Merger

Section A. The Company recognizes the Union as the sole collective
----------
bargaining agent for all cockpit Crewmembers employed by the Company. All work
performed on aircraft operated by the Company shall be performed by employees
covered under this Agreement.

Section B. Acquisitions Without Merger. In the event of an acquisition
---------------------------------------
under circumstances not resulting in the merger or integration of World
Airways, Inc.'s operations with those of another carrier, then World Airways,
Inc., or its successor in interest, shall assume the obligations of this
Agreement and shall maintain the Agreement as to the World Airways Cockpit
Crewmembers represented by the IBT prior to the acquisition until it is changed
in accordance with the Railway Labor Act. Recognition of the IBT will be
continued for all of the World Airways Cockpit Crewmembers it represented prior
to the acquisition, subject to the provisions of the Railway Labor Act.

Section C. Mergers and Acquisitions.
------------------------------------
Paragraph A. Notice of Acquisition or Merger.
----------------------------------------------

1. If World Airways, Inc. or its parent, WorldCorp, or any other subsidiary
of WorldCorp enters into any agreement of acquisition or merger with any other
air carrier or any entity which has control of or acquires control of another
air carrier, it shall notify the IBT in writing of the proposed acquisition or
merger within three (3) days after the execution of such agreement.

2. World Airways, Inc. must give written notice of the existence of this
Article of the Agreement to any carrier or any other entity which has control of
or acquires control of another air carrier with which World Airways or WorldCorp
enters into an agreement of acquisition or merger. A copy of this written
notice shall be given to the IBT within three (3) days after the parties have
signed the agreement of acquisition or merger.

Paragraph B. Assumption Agreement.
----------------------------------

World Airways, Inc. and/or its parent WorldCorp agrees to obligate the
surviving air carrier with which World enters an agreement of merger to assume
the obligations of this section. World Airways and/or its parent WorldCorp
shall be liable to the employees covered by this section for all damages as a
result of the failure to require assumption of the terms of this Agreement, but
shall not be liable after the other party to the agreement of merger has agreed
in writing to assume the obligations of this section.

Paragraph C. Integration of Seniority List(s).
----------------------------------------------

If World Airways, Inc., and another air carrier are to be merged in such a
manner as to result in a single carrier within the meaning of the Railway Labor
Act, the air carrier that will survive such merger will initiate proceedings to
integrate the seniority lists of the Cockpit Crewmembers of World Airways, Inc.,
and the Cockpit Crewmembers of such other carrier as set forth in this Section.

1. Within thirty (30) days of the announcement initiating such procedures,
meetings will be scheduled to resolve the integration of seniority list(s)
through direct negotiations with representatives from each of the following
interested parties invited to attend and fully participate in such negotiations:

(a) Two (2) representatives of the surviving carrier;
(b) Two (2) representatives of the Crewmembers of World Airways;
(c) Two (2) representatives of the Crewmembers of any other carrier
involved in the merger;
(d) Crewmember representatives will be selected by the Crewmembers or any
organization representing such Crew members.

2. The negotiations for integration of Seniority List(s) shall have the
purpose of all participants agreeing upon the integration of such list(s)
promptly and in a fair and reasonable manner. If such negotiations are not
concluded within fifteen (15) days of the commencement of such meetings, but,
not more than forty-five (45) days after the initiation of the proceedings, the
matter will be referred to final and binding arbitration by the sole arbitrator
selected as provided in subparagraph 3 below. The parties may agree to defer
such referral to arbitration by unanimous consent.

3. At the time of the initiations of the negotiating proceedings the
surviving carrier shall request a list of seven (7) names from the National
Mediation Board of persons qualified to serve as sole arbitrator if the parties
are not able to agree to such integrated Seniority List(s) as provided in
subparagraph 2. The first order of business at the negotiations shall be to
agree upon an arbitrator and, failing to agree, to work out a system for
selection of the arbitrator from among those on the list submitted by the
National

5
<PAGE>

Mediation Board. The person selected as arbitrator must agree to hear
the case within thirty (30) days after the conclusion of the time period set
forth in subparagraph 2 and must agree to render his decision within thirty (30)
days after the conclusion of the arbitration hearing. The decision of the
arbitrator shall be final and binding on all interested parties.

Paragraph D. Integration of Equipment and Operations.
-----------------------------------------------------

In the event of the merger of World Airways, Inc. with another air carrier,
the equipment and operations of World Airways, Inc., as they existed prior to
the merger shall not be integrated or intermingled with the equipment and
operations of the other air carrier until either the Seniority List(s) of the
Crewmembers have been integrated in accordance with the provisions of Paragraph
B of this section or until one hundred fifty (150) days have passed from the
date the surviving carrier initiated the seniority integration proceedings,
whichever first occurs. As pertains to World Airways, Inc., equipment
represents aircraft operated by World Airways, Inc., and operations means the
cockpit crews of World Airways, Inc.

Paragraph E. Furloughs Resulting From Merger.
---------------------------------------------

Crewmembers on the World Airways, Inc. Seniority Lists prior to the merger
who are furloughed as a result of the merger will retain recall rights with the
surviving air carrier in seniority position for the period of seven (7) years
from the date of his most recent furlough as set forth in Article XI, Section A.
8 of the Agreement, or may take severance as provided in Section E of this
Letter of Agreement if such furlough is the result of such merger and occurs
within eighteen (18) months following the effective date of the merger. Any
Crewmember on the World Airways Seniority Lists who is in furlough status sixty
(60) days prior to the effective date of a merger and who Is not recalled prior
to the effective date of the merger is not eligible for the severance pay
provided by Paragraph E of this section unless such Crewmember is recalled to
active employment with the surviving air carrier and is subsequently furloughed
as a result of the merger within eighteen (18) months following the effective
date of the merger.

Paragraph F. Severance.
-----------------------
Crewmembers who are furloughed as provided In Paragraph D and who are
entitled to severance pay as provided in Paragraph D, and who are furloughed for
a period of ninety (90) days may elect in writing to receive the severance
payment as set forth in the following schedule:

One year, but less than three years 1 month's pay
Three years, but less than five years 2 months' pay
5 years, but less than 10 years 3 months' pay
10 years, but less than 15 years 7 months' pay
15 years, but less than 20 years 12 months' pay
20 years and over 18 months' pay

Such election must be made within the thirty (30) day period following the
ninety (90) day qualifying period that the Crewmember is in furlough status. A
Crewmember who elects severance payment will thereby elect to terminate his
employment and will relinquish all rights under the labor agreement. Pay for
the purpose of severance is defined as monthly guarantee plus longevity. If the
Crewmember does not elect severance payment within the time period herein set
forth he will continue in furlough status for the period of seven (7) years as
set forth in Article XI, Section A. 8 of the Labor Agreement from the date of
his most recent furlough.

Paragraph G. Additional Air Carrier Operations.
------------------------------------------------

World Airways, Inc., and WorldCorp agree that they will not create a New
York Air type operation unless the work performed by the IBT represented
Crewmembers of World Airways, Inc., or any portion thereof, is assigned to the
Crewmembers within the scope and operation and in accordance with the terms and
conditions of the Agreement between World Airways, Inc., and the IBT represented
Crewmembers. WorldCorp may acquire other air carriers and operate such air
carriers independently of World Airways, Inc., and this section does not apply
provided that any such carrier does not use any aircraft (in the service of
World Airways, Inc. as of the date of the execution of this Article of the
Agreement) diverted from World Airways, Inc.

Paragraph H. Representation.
----------------------------

In the event of a merger of World Airways, Inc. with another air carrier
which results in creating a single air carrier within the meaning of the Railway
Labor Act, representation will be determined In accordance with the Railway
Labor Act.

Paragraph J. Moving Expenses.
-----------------------------

Any crewmember who, as a result of a merger, is required to move his
residence within Two Hundred Seventy (270) days from the effective date of the
merger shall receive moving expenses equivalent to those set forth In Article VI
of the Agreement.

Paragraph J. Duration.
-----------------------
This section shall remain in effect until June 30, 1998 or until eighteen
(18) months following the effective date of any merger, whichever shall first
occur.

6
<PAGE>

ARTICLE II

Definitions
-----------

As used in this Agreement, except as otherwise provided:
---------------------------------------------------------
Section A. "Pilot" means Captain, First Officer, Second Officer as herein
----------
defined.

Section B. "Captain'" means the Pilot who is in command of the aircraft
-----------
and its Crewmembers while on duty and who is responsible for the manipulation
of, or who manipulates, the controls of the aircraft while under way including
take-off and landing of such aircraft, and who is properly qualified to serve as
and holds a currently effective airman's certificate authorizing him to serve as
such and who holds a bid as a Captain.

Section C. "First Officer" means a Pilot who is second in command on
----------
flights having two Pilots whose duties are to assist or relieve the Captain in
the manipulation of the controls of the aircraft while under way including take-
off and landing such aircraft; who is properly qualified to serve as and holds a
currently effective airman's certificate authorizing him to serve as a First
Officer and who holds a bid as a First Officer.

Section D. "Second Officer" means a Pilot whose duty it is to perform the
---------
function of a Second Officer as specified by the Company and who holds a
currently effective airman's certificate authorizing him to serve as such Second
Officer and who holds at least a current commercial airman's certificate and
Instrument rating, and Flight Engineer rating and who holds a bid as Second
Officer.

Section E. "Flight Engineer" means a Crewmember designated by the Company
----------
to perform all work on aircraft operated by the Company generally recognized as
the work of a certificated Flight Engineer including the responsibility for
assuring the airworthy condition of the aircraft on which he is to serve before
departure, including recognition and correction of malfunctions, for enroute
ground maintenance and/or supervision thereof when assigned. A Flight Engineer
shall hold a currently effective airman's certificate authorizing him to serve
as a Flight Engineer. He shall also hold a currently effective airman's
certificate authorizing him to serve as an airframe and powerplant mechanic. A
Flight Engineer shall not be required by the Company to hold any other airman's
certificate.

Section F. "Category" means the respective crew skill (Pilot or Flight
----------
Engineer) held by a Crewmember.

Section G. "Crewmember" means the Pilots and Flight Engineers covered by
----------
this Agreement employed by the Company, excepting Management Crewmembers.

Section H. "Crew Class" means the respective job designation of a
----------
Crewmember within his respective category, as follows:

CATEGORY CREW CLASS
(Craft) (Bid)

Pilot Captain
First Officer
Second Officer

Flight Engineer Flight Engineer
Permanent Flight Engineer
Second Officer Over FAA Mandatory Age
(Permanent Flight Engineers and Second Officers over FAA Mandatory Age are
Crewmembers who work the Flight Engineer position who are not covered by the
Flight Engineer Prior Rights Clause.)

Section I. "Flight pay" means the hourly rate of pay based on the time the
----------
Crewmember performs the duties of a Crewmember, and shall be measured Block to
Block.

Section J. "Block to Block" means the elapsed time starting with the
----------
removal of the chocks and other restraining devices from the wheels of the
aircraft with the intent of moving the aircraft for whatever purpose and ending
with the time the chocks or other restraining devices are replaced.

Section K. "Duty Aloft" means the entire period during which a Crewmember
----------
is assigned as an operating Crewmember of an aircraft during Block to Block
time.

Section L. "Scheduled for Duty Aloft" means the assignment of a Crewmember
----------
on the basis of the flight time established in the operations schedules.

Section M. "Management Crewmembers" means Pilots or Flight Engineers who
----------
now occupy or accept a management position with the Company as specifically set
forth in Article XXX, "Management Crewmembers".

Section N. "Type" means the various aircraft operated by the Company.
----------

Section O. "Base" means the geographical point designated as a crew base
----------
from which a Crewmember operates

Section P. "Month" means the period of time commencing with and including
----------
the first day of the month up to and including the last day of the month with
the exception of the first quarter of the year which shall be as follows:

January shall commence on January 1 at 0001Z, and end January 30 at 2400Z;
February shall commence on January 31 at 0001Z and end March 1 at 2400Z; March
shall commence on March 2 at 0001Z and end March 31 at 2400Z.

Section Q. "Calendar quarter" means January, February, March, inclusive;
----------
April, May, June, inclusive; July, August, September, inclusive; October,
November, December, inclusive.

Section R. "Domestic" means the forty-eight (48) Contiguous states and
----------
the District of Columbia.

Section S. "International" means any point or area outside of the forty-
----------
eight (48) contiguous states and the District of Columbia.

Section T. "Reduction" means either a reduction in flying hours or the
----------
downgrading of Crewmembers.

7
<PAGE>

Section U. "Revenue flying" means all flying, including all ferry flying,
----------
done on aircraft operated by the Company except test, transition or training.

Section V. "Duty Time" means that time interval between the time a
----------
Crewmember is required to report for duty and the time he is released from duty
as specified in Article XV.

Section W. "Day" means a period of twenty-four (24) consecutive hours,
----------
unless otherwise specified.

Section X. "Enroute Station" is any station other than the Crewmember's
----------
Base.

Section Y. "Active Service" means all accumulated time, commencing with
----------
date of hire as a Crewmember, for which the Crewmember is paid by the Company,
including any time that he receives any portion of sick leave pay. A month of
Active Service will be credited if the Crewmember is in pay status for fifteen
(15) days or more in any month. Twelve (12) months of Active Service
constitutes one (l) year of Active Service.

Section Z. "Foreign Base" means any Base outside the United States (48) and
----------
D.C. In the event that a Crewmember is hired and initially based at a "Foreign
Base" such Base shall be considered to be the Base of the Crewmember.

Section AA. "Surplus" means to be in excess of Company established crew
-----------
class positions at a base or in the seniority system.

ARTICLE III

Compensation
------------

Section A. Each Crewmember shall be compensated in accordance with the
----------
following schedule on a monthly basis in respect to his accrued Active Service
as defined in Article II, Section Y.

2nd year of Active Service $ 25.00 per month
3rd year of Active Service 50.00 per month
4th year of Active Service 75.00 per month
5th year of Active Service 100.00 per month
6th year of Active Service 125.00 per month
7th year of Active Service 150.00 per month
8th year of Active Service 175.00 per month
9th year of Active Service 200.00 per month
10th year of Active Service 225.00 per month
11th year of Active Service 250.00 per month
12th year of Active Service 275.00 per month
13th year of Active Service 300.00 per month
14th year of Active Service 325.00 per month
15th year of Active Service 350.00 per month

Crewmembers in their first year of Active Service with the Company shall accrue
Active Service but receive no active service pay. Active service pay will be
paid for each calendar month of Active Service and will begin the calendar
month after the Crewmember completes his first year of service.

Section B.
----------

(1) Each Crewmember will be compensated for his hourly flight time
based on the Type of equipment he is flying as set forth in the equipment
groups below:

Group 1: Boeing 747's (all)
MD-11

Group 2: DC-10 (-10/15/30,/40)
L-1011 (100/200/500)
A-300 (B2/B4/B4-600)
A-310 (200/200LR/300)
B-767

Group 3: B727/737
<TABLE>
<CAPTION>
Eff. 8-15-94 7/1/95 7/1/96 7/1/97
------------------------ ------- ------- -------
<S> <C> <C> <C>
Group 1 $110.00 $113.30 $116.70 $120.20
Group 2 $103.00 $106.09 $109.27 $112.55
Group 3 $ 74.16 $ 76.38 $ 78.67 $ 81.03
</TABLE>

(2) IRO Pay. IRO pay at the rate of $2.50 per block hour will be
-------
paid to the designated IRO on flights in excess of 8 hours block to block
requiring an additional crewmember.

(3) First Officers and Flight Engineers in their second and
subsequent years of Active Service will be paid the percentage of the Captain's
hourly pay and monthly guarantee set forth in subsection (1) of this Section
based on the following schedule:

2nd year of service 49%
3rd year of service 51%
4th year of service 52%
5th year of service 53%
6th year of service 60%
7th year of service 61%
8th year of service 62%
9th year of service 63%
l0th year of service 64%
11th year of service 65%

(4) Second Officers, when required to operate the particular Type, in
their Second and subsequent years of Active Service will be paid the percentage
of the Captain's hourly pay as set forth in subsection (1) of this Section based
on the following schedule:

2nd year of service 38%
3rd year of service 40%
4th year of service 42%

8
<PAGE>

5th year of service 44%
6th year of service 50%
and thereafter

(5) Crewmembers in their first year of Active Service will be paid
$2,000 a month. Hours in excess of this guarantee will be paid at the rate of
1/65th of the monthly guarantee rate

(6) Permanent Flight Engineers, so designated on the Pilot Category
Seniority List, who have accepted this position prior to April 2, 1981 shall be
compensated on the Flight Engineer's scale. Any crewmember who was listed on
the Pilot Category Seniority List of July 1, 1970 and who held an A & P rating
prior to January 1, 1987 and who maintains such A & P qualification will be
compensated on the Flight Engineer's scale instead of the Second Officer scale.

(7) An upgrading crewmember's higher rate of pay shall commence the
day following his or her release by the Check Airman.

<TABLE>
<CAPTION>
Section C. Each Captain will be paid the monthly
guarantee based on his equipment group as follows:
---------------------------------------------------
Eff. Eff. Eff. Eff.
8/15/94 7/1/95 7/1/96 7/1/97
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Group 1 $7,150.00 7,364.50 7,585.50 7,813.00
Group 2 $6,695.00 6,895.85 7,102.55 7,315.75
Group 3 $4,820.40 4,964.70 5,113.55 5,266.95
</TABLE>

Longevity pay as provided in Section A is in addition to the guarantee pay.

Section D. All pay under this Agreement shall be paid in United
---------
States Dollars, semi-monthly, on the tenth (10th) and twenty-fifth (25th) day of
each month. All pay adjustments shall be made on the tenth (10th) day of the
month following the month when such pay is earned or becomes due with fifty
percent (50%) of the Crewmember's monthly guarantee and longevity to be paid on
the tenth (10th) day and twenty-fifth (25th) day of each month. not used, he
shall be credited the equivalent of one (1) hour of hourly flight pay for each
four (4) hours of duty or major fraction thereof, with a minimum of one (1)
hour's flight pay credit. Whenever a Crewmember is called to the field for the
purpose of serving as a Flight Crewmember and is used, he shall be credited with
a minimum of one (1) hour's flight pay credit.

Section E. Whenever a Crewmember is called to the field for the purpose of
---------
serving as a Flight Crewmember and is not used, he shall be credited the
equivalent of one (1) hour of hourly flight pay for each four (4) hours of duty
or major fraction thereof, with a minimum of one (1) hour's flight pay credit.
Whenever a Crewmember is called to the field for the purpose of serving as a
Flight Crewmember and is used, he shall be credited with a minimum of one (1)
hour's flight pay credit.

Section F. In the event an aircraft is forced to return to its
---------
originating station due to malfunction of the aircraft or other causes and the
flight is canceled, the Crewmember will be credited with hourly flight pay,
based on actual flight time with a minimum of one (1) hour's flight pay credit.

Section G. The Crewmember is to receive no compensation for training,
---------
qualifications, upgrading or proficiency flights.

Section H. In the event the Company places equipment in operation other
---------
than the equipment provided herein, the Company and the Union will meet as soon
as practicable to negotiate the Captain's rate of pay. In the event the parties
cannot agree within thirty (30) days as to the rate to be established, the
matter will be submitted to expedited arbitration. The parties will request the
arbitrator to make his award as soon as feasible, but no later than thirty (30)
days after the hearing. During the process of negotiation and arbitration, if
necessary, the Company will post the equipment for bid and will establish an
interim rate, which will be set forth on the bid posting, with the understanding
that any determination as a result of the negotiations or arbitration will be
made retroactive to the institution of service on such equipment.

Section I. When a Crewmember changes Type or Crew Class by vacancy bid or
----------
displacement during a month, his guarantee shall be prorated accordingly.

Section J. 1. A Crewmember will not be required to be qualified on more
----------
than one Type of equipment unless qualification is required on the bid. A
Crewmember who is qualified and holds an assignment on more than one Type shall
be paid at a rate equal to that of the highest paying Type.

2. In order to maintain eligibility of aircraft, not at the time
being operated by the Company, that are allocated to the Civil Reserve Air
Fleet, a crewmember may be required to maintain qualification on such equipment.
In such cases Crewmembers who are qualified on the equipment (having flown on
such Type and Crew Class within the preceding twelve (12) months and requiring
only landings, proficiency check or recurrent ground training) will be awarded
such position by bid or if there are insufficient bidders, they will be assigned
such positions with awards in seniority order and assignments in inverse order
of seniority. Should there be an insufficient number of qualified Crewmembers,
awards and assignments shall be made system-wide among those Crewmembers not
qualified on the equipment. During the time of training Crewmember(s) assigned
to such training shall be paid at the rate for that Type, if it is higher, for
any month that the Crewmember participates in such training to maintain
qualification on the equipment. If such Crewmember holds a line bid during the
month(s) in which such training occurs, the time spent in such training shall be
treated as lost time under Article XIV, Section A.11.

Section K. Whenever a Crewmember performs or supervises maintenance work
----------
additional to his normal duties on the aircraft, he shall be paid Fifteen
Dollars ($15.00) per hour or fraction thereof computed to the nearest one
hundredth (1/100th) with a minimum of one hour's pay.

Section L. A newly hired Crewmember who receives training prior to his
----------
qualification as a Crewmember will be paid a minimum of One Thousand dollars
($1,000.00) per month while in training. This sum shall include all
compensation while in training

9
<PAGE>

except that such newly hired Crewmember will be covered by the provisions of
Article IV, Per Diem, when such Crewmember is assigned to training at a location
other than a Company Base. Upon qualification as a Crewmember the Crewmember
will be compensated in accordance with Section B of this Article.

Section M. A Crewmember furloughed prior to the 16th of a month will
----------
receive his prorated guarantee and longevity on the 25th of that month and all
other pay due him on the 10th of the following month provided the crew member
has returned all required Company property. A Crewmember furloughed after the
15th of a month shall, in addition to his regular check on the 25th, receive all
remaining pay due him on the 10th of the following month provided the crewmember
has returned all required Company property.

Section N. Pay will be computed to the nearest one-one hundredth (1/100th)
----------
of an hour. Any proration of monthly guarantee and longevity pay for payroll
purposes will be on a one-thirtieth (1/30th) per day basis.

Section O. Deadhead.
---------- ---------

1. Deadhead time means the time spent by a Crewmember in
traveling from one reporting point to another, at the direction of the
Company for whatever purpose, while not acting as a Crewmember of an
aircraft.

2. (a) A Crewmember deadheading by air on a flight not
published in the Official Airline Guide (OAG) shall be paid on the
basis of actual time spent traveling between points. (Block to
block).

(b) A Crewmember deadheading by air on a flight published
in the OAG shall be paid on the basis of the scheduled time as
published in the OAG.

(d) Crewmembers who are scheduled to deadhead on scheduled
air carriers will be scheduled on a cost effective (not necessarily
nonstop) and direct reduced air fare flight(s) when space is available
at the time reservations are made.

3. Deadhead pay shall be computed at the rate of fifty percent (50%) of
the Crewmember's hourly flight pay. A Crewmember deadheading on any aircraft who
is not provided a passenger seat for an entire flight will be credited deadhead
pay at the rate of seventy-five percent (75%) of his hourly flight pay for any
such flight. For purposes of this paragraph, the passenger-like jump seat in the
B-747 and DC-10 cockpits will be deemed a passenger seat.

4. Crewmembers deadheading by surface transportation will be paid for all
deadheading of distances over forty (40) statute miles including the first forty
(40) miles. The point to point statute mile distance shall be taken from the
vehicle odometer and verified by the vehicle driver. When the distance
computed is less than forty (40) statute miles no deadhead pay is applicable.
Surface deadhead pay will be calculated by using the statute mileage divided by
40 miles per hour and the resulting answer divided by four (4) to provide the
surface deadhead pay hours. This calculation will be accomplished by
Scheduling.

5. For the purpose of clarification, the below listed airports are
classified as "Co-terminals" and travel (deadhead) between these terminals or
travel from a hotel layover point situated in the Co-terminal area to one of
these terminals, shall not be considered deadhead

Los Angeles/Burbank/Long Beach/Ontario
San Francisco/Oakland/Travis
Seattle-Tacoma/McChord/Boeing
Chicago O'Hare/Chicago Midway
Detroit Metropolitan/Willow Run
Cleveland/Akron
Newark N.J./J.F. Kennedy/LaGuardia
Baltimore/Washington National/Dulles International
Tokyo International/Yokota AFB
Anchorage International/Elmendorf AFB
Paris Orly/LeBourget/Charles DeGaulle
Honolulu International/Hickam AFB
Kadena/Naha
Leonardo de Vinci/Ciampino
London-Gatwick/London Heathrow

6. Deadhead time for certain crew movements will be governed by the
one (1) minute crew movement adjustment, which involves the positioning
and depositioning by computer input of a Crewmember from/to his base
assignment from/to a duty assignment when actual Crewmember movement is not
involved. Examples of utilization of the one (l) minute technique (assuming
the Crewmember is at his home of record) are as follows:

(a) Philadelphia base, home of record OAK. One minute to/from
Philadelphia to OAK.

(b) Philadelphia base, home of record OAK. Assigned a trip
additional to his line out of OAK and return OAK. One minute to/from OAK.
Should the Crewmember lay over at his home Base under these circumstances,
he would be paid per diem and transportation and hotel would be arranged by
the Company.

If the Crewmember actually performs the deadhead travel, he will be paid as set
forth in this Section.

Section P. A Crewmember who has once qualified on any Company aircraft
----------
shall be paid his guarantee for that Type and Crew Class when in training until
he qualifies on any other Type and Crew Class, except that when a Crewmember is
being reduced to lower pay status, he will retain his current rate for a

10
<PAGE>

period of no more than thirty (30) days from the effective date of the reduction
or the date of his qualification, whichever first occurs. Following
qualification the Crewmember shall be paid at the rate applicable for the new
Type and Crew Class as specified in Sections B and C of this Article. A Captain
or First Officer who voluntarily exercises his seniority for a Second Officer
position pursuant to Article XII, Section E.4 will be compensated at the Second
Officer rate when at a pilot's mandatory retirement age, except as provided in
Section B. 5 of this Article.

ARTICLE IV

Per Diem
--------
Section A. A Crewmember who is away from his Base on duty time shall
----------
receive hourly per diem for each hour or fraction thereof that he is away from
his Base. Per Diem shall start in accordance with the following times:

Oakland Deadhead - 1.0 hour prior to departure
Oakland Live - 1.5 hours prior to departure
San Francisco - 2.0 hours prior to departure
Travis AFB - 3. 0 hours prior to departure
Charleston Deadhead -1.0 hour prior to departure
Charleston Live - 1.5 hours prior to departure

Per diem shall end in accordance with the following times:
Oakland - 1.0 hour after arrival
San Francisco - 1.5 hours after arrival
Travis AFB - 2.0 hours after arrival
Charleston - 1.0 hour after arrival

Departure and arrival times shall be calculated by utilizing the scheduled
departure and actual block-in time on flights not published in the OAG and
scheduled times for flights published in the OAG.

The hourly per diem rate is as follows:
<TABLE>
<CAPTION>
effective 8/15/94 7/1/95 7/1/96 7/1/97
----------------- ------ ------ ------
<S> <C> <C> <C>
$1.75 $1.95 $2.10 $2.20
</TABLE>

This hourly rate is designated as compensation for meals, laundry, and
incidental expenses.

Section B. The Company will book lodging in suitable and adequate hotels
-----------
on a single occupancy basis. The Company will pay the hotel bill. The
Crewmember will be required to pay for other incidental charges to the hotel
bill at the time of checkout. Otherwise, such charges will be deducted by the
Company. When the Company does not provide facilities outlined above,
reasonable and necessary expenses will be paid.

Section C. The Company will in addition provide ground transportation from
----------
the aircraft to the hotel and return, or in the event the Company does not
provide ground transportation, it will reimburse Crewmembers for all reasonable
and necessary ground transportation expenses. If transportation on line does
not arrive within one (1) hour from block-in, Crewmembers, at their option, can
order a taxi for immediate transportation to the hotel and receive full
reimbursement by the Company.

Section D. The Crewmember will submit to the Company proof of expenses for
----------
which he is entitled to reimbursement.

Section E. The Per Diem and expenses specified in this Article shall be
----------
paid in addition to all other compensation as provided for in this Agreement.

Section F. Crew Hotels.
------------------------

1. The Crewmember Council or its designee will confer with the Company on
the choice and location of crew hotels prior to their designation as crew
hotels, whenever possible. The Company will consider all of their suggestions
in designating crew hotels. Should any hotel, after designation, be found
unsatisfactory, the Company, after conferring with the Council or its designee,
will initiate action to either correct the problem or designate a different
hotel. The minimum requirement for a designated hotel will be a single room
with bath for each Crewmember.

2. Downtown hotels will be provided at all layover cities if the layover
is scheduled for more than thirty (30) hours block to block. The Council or its
designee and the Company may agree to exceptions respecting this requirement.
Both parties recognize that in certain situations alternatives to downtown
hotels, as described in the preceding paragraphs, may meet the needs of both
parties. When these situations occur, the Union and the Company shall meet to
discuss the alternatives. The criteria to be considered are:

a) Cost to the Company;
b) Cost to the Crewmembers; and
c) Suitability and convenience of alternative hotels.
After balancing these criteria, the Company may, with the concurrence of
the Union, select an alternative hotel and the Union shall not unreasonably
oppose such selection.

3. Downtown hotels are defined as hotels in the major metropolitan
downtown area where there are restaurants, shops and public transportation
within walking distance. An exception to the above will be the Newark
International Airport where Newark will be considered the major metropolitan
area. All layovers at Newark will be downtown, irrespective of the layover
length, if rooms are available.

11
<PAGE>

ARTICLE V

Foreign Service
---------------

Section A. Whenever the Company establishes a Foreign Base, it shall
-----------
give written notice to the Union at least thirty (30) days prior to such
establishment, if possible to do so. Within ten (10) days of the notice to the
Union the parties will begin negotiations to determine if any cost of living
increase is appropriate and the amount of such increase, if appropriate. At the
commencement of such negotiations the parties will agree upon an arbitrator to
resolve the dispute if they cannot reach agreement within twenty (20) days
following the beginning of negotiations. The arbitrator will be selected from
among the following designated persons: Julius Draznin, John Kagle, Justin
Smith, and selection among these designated arbitrators will be in order set
forth above dependent upon availability to conduct the hearing within twenty
(20) days after the negotiation period. The arbitrator's decision shall be
rendered within twenty (20) days following the conclusion of the hearing and
shall be effective as of the commencement of implementation of such foreign
base.

Section B. The Company will provide benefits for Crewmembers in foreign
----------
service equal to those provided crewmembers covered under the Workmen's
Compensation Act then in effect in the State of Virginia, unless required by law
to provide greater benefits under the laws of any other jurisdiction.

Section C. For Unemployment Compensation purposes, Crewmembers shall be
----------
covered by the appropriate state law. In the event no state benefits are
applicable for a Crewmember who is furloughed from a Foreign Base, the Company
shall provide the benefits which would otherwise have been provided by the law
of the state of Virginia, provided the Crewmember otherwise meets the
requirements for benefits.

ARTICLE VI

Moving Expenses
---------------

Section A. Crewmembers will be reimbursed for moving expenses as provided
----------
in this Article under the following circumstances:

1. Crewmembers who are successful bidders for vacancies at any new
Crewmember Base within the first six (6) months of its operation. In the event
a Base is closed and subsequently re-established, the six (6) month period shall
commence again effective with the date of re-establishment.

2. Crewmembers who receive a permanent assignment by the Company to
another Company Base.

3. Crewmembers who are affected by the closing of a Company Base.

4. Crewmembers furloughed at one Base who are recalled to another Base.

5. Crewmembers furloughed from an International Base, both upon being
furloughed and when recalled to the same Base, except any Crewmember who chooses
furlough status at such International Base rather than the exercise of his
seniority to displace to another Base.

Section B. Moving expenses of all other Crewmember transfers shall be
----------
borne by the Crewmember except that the Company shall cooperate in endeavoring
to furnish gratuitous or reduced fare air transportation to Crewmember and his
"immediate family".

For the purpose of this Article, "immediate family" as used herein shall
mean the Crewmember's spouse children and dependent relatives of the Crewmember
living within the Crewmember's household.

Section C. The moving expenses provisions contained in this Article do
----------
not apply to newly hired Crewmembers who are reporting for their first Base
assignment on completion of their initial training.

Section D. When the Company is obliged to reimburse crewmembers for
----------
moving expenses, it will do so on the following basis:

1. Such Crewmember shall be provided transportation for himself
and his immediate family from his present Base of Permanent Assignment to
his new Base of Permanent Assignment, type of transportation to be
determined by the Company.

2. Such Crewmember will be provided with the transportation up to
a maximum of 10,000 pounds of the Crewmember's furniture and household
effects. The Company may, at its option, prescribe or control the
shipment of household furniture and effects from the time of packing at
the point of departure to the time of unpacking at the point of arrival.
The Crewmember will cooperate in making necessary shipping arrangements
so as to minimize expenses.

The Company shall prepay or pay on delivery all charges involved
for shipping, insurance, drayage, packing and unpacking (including
overseas packing, if necessary), and storage. Any claims for damages or
loss resulting from such move or storage shall be handled by the
Crewmember directly with the mover or the storage company.

12
<PAGE>

The Crewmember who elects to place his effects in storage will be
reimbursed for storage costs as they occur, but not to exceed estimated
moving costs.

3. Such Crewmember shall be paid hotel and meal expenses for
himself and each member of his immediate family at the rate of twenty-
five dollars ($25.00) for the Crewmember, twenty-five dollars ($25.00)
for his spouse and fifteen dollars ($15.00) for each dependent per day at
a maximum of one-hundred ten dollars ($110.00) per day. This allowance
shall be determined on the basis of the number of travel days required,
with automobile travel based on four hundred fifty (450) miles per day,
or if the travel is performed by air, the actual number of days required
to perform the travel. The payment provided by this paragraph is in lieu
of the per diem allowance provided by Article IV, Section A.

4. Such Crewmember shall, for the first three (3) days after
arriving at a new Base be free of all duty with the Company and be paid
settling expenses of Fifty Dollars ($50.00) each for himself and his
dependents, and shall be paid at the time of his departure.

5. A Crewmember entitled to moving expenses under this Section
may defer moving for up to two hundred and seventy (270) days after being
transferred from one Base to another without the loss of the benefits
provided for in this Section.

6. When a Crewmember drives his car from his former permanent
Base to a new permanent Base, he shall be allowed seventeen cents (17)
per mile for the most direct AAA mileage between such points. If the
period of time that the Crewmember is expected to remain at such Base is
expected to be less than 270 days, the Company may elect to ship the
Crewmember's automobile by public transportation or it may elect to
provide such Crewmember with a rental car at such Base. If the Company
chooses to send the car by public transportation it will provide the
Crewmember with a rental car at such Base until his automobile arrives.

7. Reimbursement will only be made for moving from one Company
Base to another Company Base as provided in Section A but not for moving
to any other location, except as provided in Article XI, Section C.1.
Company Base for this purpose means any living location within one
hundred (100) statute miles of the Base.

Section E.
---------

1. A Crewmember, awarded a bid or displacing when served a notice of
reduction at a permanent base, may elect to commute to his new base. A
Crewmember so electing will be entitled to the Company providing transportation
for the Crewmember's personal effects up to a maximum of five hundred (500)
pounds. Such Crewmember will not be entitled to the other provisions of Article
V except Section D.6 (automobile mileage expense).

2. Such Crewmember will be governed by the commuting rules as agreed to
and set forth in the Basic Operations Manual only

Section F. In the event a Crewmember is being permanently reassigned to a
----------
Foreign Base, the Company shall provide thirty (30) days lodging at a hotel or
comparable accommodation selected by the Company.

ARTICLE VII

Vacations
---------

Section A. Vacations will be earned on a calendar year basis. Vacations
----------
will commence in the calendar year following the calendar year in which the
vacation is earned and may not overlap into the following year as set forth in
Section F.7.

Section B. Each Crewmember who, as of any January 1 has completed the
----------
below listed Active Service years shall be entitled to the vacation periods
indicated. Active Service years completed:

1 through 5 14 days
6 through 9 21 days
10 and thereafter 28 days

Each Crewmember based outside the United States at the time of his vacation
shall be entitled to a minimum of twenty-one (21) days vacation each year;
however, the vacation pay provided by Section D will be based on the
Crewmember's Active Service years completed. Examples:

1. Crewmember hired January 1, 1970

13
<PAGE>

January 1, 1970/December 31, 1970 No vacation
January 1, 1971/December 31, 1971 2 weeks' vacation
January 1, 1972/December 31, 1972 2 weeks' vacation
January 1, 1973/December 31, 1973 2 weeks' vacation
January 1, 1974/December 31, 1974 2 weeks' vacation
January 1, 1975/December 31, 1975 2 weeks' vacation
January 1, 1976/December 31, 1976 3 weeks' vacation
January 1, 1977/December 31, 1977 3 weeks' vacation
January 1, 1978/December 31, 1978 3 weeks' vacation
January 1, 1979/December 31, 1979 3 weeks' vacation
January 1, 1980/December 31, 1980 4 weeks' vacation

2. Crewmember hired July 1, 1970

July 1, 1970/December 31, 1970 No vacation
January 1, 1971/December 31, 1971 7 days or 7 days' pay
January 1, 1972/December 31, 1972 2 weeks' vacation
January 1, 1973/December 31, 1973 2 weeks' vacation
January 1, 1974/December 31, 1974 2 weeks' vacation
January 1, 1975/December 31, 1975 2 weeks' vacation
January 1, 1976/December 31, 1976 2 weeks' vacation
January 1, 1977/December 31, 1977 3 weeks' vacation
January 1, 1978/December 31, 1978 3 weeks' vacation
January 1, 1979/December 31, 1979 3 weeks' vacation
January 1, 1980/December 31, 1980 3 weeks' vacation
January 1, 1981/December 31, 1981 4 weeks' vacation Section C. Effective
----------
January 1, 1979 Active Service years shall be calculated in accordance with
Article II, Section Y. If a Crewmember is on furlough or leave of absence and
does not accrue Active Service for any calendar month, his vacation allowance
will be reduced by one-twelfth (1/12) for any month in the calendar year that he
did not accrue Active Service, for example, a Crewmember with two (2) years of
service who is on furlough for two (2) full calendar months in any calendar year
would be entitled to ten-twelfths (10/12) of fourteen (14) days for his
vacation. Vacation time will be prorated to the nearest full day.

Section D. A Crewmember who has completed one (1) through five (5) service
----------
years will receive four percent (4%) of his actual earnings during the calendar
year in which the vacation was earned. A Crewmember who has completed six (6)
through nine (9) years will receive six percent (6%) of his actual earnings
during the calendar year in which the vacation was earned. A Crewmember who has
completed ten (10) or more service years will receive eight percent (8%) of his
actual earnings during the calendar year in which the vacation was earned which
earnings include all earnings before deduction for the Crewmembers Salary
Reduction Plan (401K). If a Crewmember completes his fifth (5th) or tenth
(l0th) service year in any calendar year, he will receive the appropriate
percentage for the period prior to his completion of his fifth (5th) or tenth
(10th) service year, as the case may be, and the appropriate percentage for the
period after he has completed his fifth (5th) or tenth (10th) service year, as
the case may be.

Section E. Any newly hired Crewmember will have his vacation prorated from
----------
date of hire until December 31 of the year in which he was hired based upon his
months of Active Service during such year. The newly hired Crewmember may, at
his option, either bid for his prorata vacation in accordance with Section F, or
receive prorata vacation pay in lieu of vacation.

Section F. 1. The Company will provide each Crewmember with a vacation
------------
bid form on or before October 1 of each year for bidding for the succeeding
year.

2. The bid form will enable all Crewmembers who are entitled to more than
two weeks vacation to split their vacation into two vacation periods. Any
combination of days may be indicated to determine the split as long as no period
is less than seven days; e.g., a 28-day vacation could be split into 21-7, 20-8,
15-13, etc. The Crewmember must indicate which period is his primary vacation
preference and which is his secondary choice.

3. Vacation bid forms shall be submitted to the Flight Operations
Department, Herndon, by October 31. The Crewmember will receive a receipted copy
of his bid.

4. Bids will be awarded by the Company on or before December 1 of each
year and will be posted and placed in each Crewmember's mail box. Period award
sheet will show whether vacation was bid or assigned.

5. Bids will be awarded in seniority order on the basis of the
Crewmember's Base, Type and Crew Class as of October 31 for the vacation year
being bid. In the event any Base, Type, and/or Crew Class bid has been posted
on or before October 31st, the Crewmember will be awarded a vacation period
based on any such bid award. Vacations awarded after the vacation bidding
process will be handled as provided by Subsection 9. of this Section

6. A Crewmember who bids a split vacation will be awarded his highest
choice in seniority order by Base, Type and Crew Class. After all bidding
Crewmembers have been awarded a choice, the secondary vacation will be awarded
in seniority order by Base, Type and Crew Class

7. Options provided on the bid forms for all Crewmembers' vacation and
split vacation (primary and secondary) are as follows:

(a) may select any start date within the year that does not
overlap into the next year; i.e., June 8, September 5, March 7, etc.

(b) may select any start date in the first or last part of any
month; i.e., last half July, first half August, last half April, etc.

(d) may select any date with a plus or minus range; i.e., 15
July plus/minus 30 days - this bid would be awarded to the closest
available slot on either side of July 15.

(e) may also select a date with just plus or minus range; i.e.,
1 Jan + 300 - this would award the vacation on the first available start
date starting with January 1, 2, 3, 4, 5, etc.

8. The preference sheet may specify any one period not to exceed seventy
(70) consecutive days from January 1st through the following September 30th that
may be closed to

14
<PAGE>

vacation bidding, or in which vacation bidding is to be limited in number of
available vacation bids.

9. Once established, a vacation may not be changed or canceled except by
agreement of the Company and the Crewmember except the Company may change or
cancel the vacation award for any Crewmember who once awarded a vacation period
bids out of his Crew Class, Type or Base, in which case the Crewmember and the
Company will arrange a new vacation period(s).

10. A crewmember who does not establish a preference will be assigned a
vacation period by the Company.
Section G.
----------

Vacations shall not be cumulative and must be taken within the calendar year
due. If the Crewmember is denied his vacation in such calendar year as provided
in Section F. 9, the Crewmember and the Company will agree on an alternate
vacation period to occur within the first quarter of the following year.

Section H. Upon termination a Crewmember will be paid the vacation pay he
----------
has earned during the year of termination provided that no vacation pay will be
paid to any Crewmember who resigns without giving the Company fifteen (15) days
written notice prior to his last day of work, unless the Company waives the
notice period or some portion of it.

Section I. Upon furlough a Crewmember will be paid the vacation pay he has
----------
earned during the year of furlough and any vacation pay accrued but not yet
received for the prior year unless the Crewmember notifies the Company in
writing that he elects to receive his vacation(s) and vacation pay as provided
in this Article. If the Crewmember accepts his vacation pay at time of furlough,
he shall not be entitled to vacation time, but shall begin accruing vacation
credit upon his return to Active Service.

Section J. Vacations will begin and end at 12 midnight local time at the
----------
Crewmember's domicile. The Crewmember will be scheduled to be off duty for at
least twelve (12) hours before and after his vacation period. If the beginning
of a Crewmember's vacation is delayed due to the Company's fault, he shall be
paid one twentieth (1/20th) of his guarantee including longevity pay, in
addition to all other pay for each day of such delay, and his vacation will not
be reduced. For the purposes of this paragraph a Crewmember's vacation is
considered delayed if he is not off duty at his home domicile at least six (6)
hours before the beginning of his vacation.

Section K. Any Crewmember based at an International Base will receive four
----------
(4) days added to his vacation as travel allowance. His vacation pay will not
be increased. This four (4) day period will be counted toward his guaranteed
days off during that month. Crewmembers based at International Bases at time of
vacation shall receive, during vacation, those amounts to which they are
entitled under Article V, Foreign Base.

ARTICLE VIII

Sick Leave
----------

Section A. Accrual.
-------------------

(1) Each Crewmember will accrue 5.5 hours of sick leave credit for
each calendar month of Active Service as a Crewmember. Sick leave credit
will accumulate until the Crewmember has a total of five hundred twenty-
five (525) hours of sick leave credit. Such sick leave will be accumulated
in a bank for each Crewmember for use as set forth in this Article.

Section B. Usage. After six (6) months of Active Service, sick leave with
----------
pay shall be allowed whenever a Crewmember's absence is found to have been due
to illness or injury and sick leave with pay is requested, provided the
Crewmember has a sick leave accrual of time then earned to his credit in
sufficient amount. The Company may require that the Crewmember who claims sick
leave be examined by a Company physician to substantiate such claim. The
Crewmember may also be required to obtain a release for return to duty from the
Company physician. The Company shall assume the expense of examination by its
physician when such examination is required by the Company.

Section C. Payment. Each Crewmember while on sick leave shall receive
---------- -------
payment from his sick leave bank in any month that he loses pay hours from his
Line of Flying as a result of such illness. Such payment will be limited to his
applicable guarantee for that month. His sick leave bank will be debited in the
amount of his applicable monthly guarantee less his pay hours. Crewmembers who
do not hold a Line of Flying for any month will receive sick leave pay at the
rate of 3-2/3 hours per day that the Crewmember is unavailable for scheduled
duty, not to exceed the Crewmember's applicable monthly guarantee.

Section D Reaccrual. Once a Crewmember has accumulated 525 hours and
--------------------
subsequently depletes his accrued sick leave to less than 100 hours, he will
reaccrue sick leave at the rate of seven (7) hours per month until 100 hours are
again accumulated, at which time his accrual rate will revert to 5.5 hours per
month.

Section E. Rehired Crewmember. A Crewmember on the Seniority List whose
------------------------------
employment is terminated loses all sick leave

15
<PAGE>

credit. If he is later rehired within three (3) years of the date of his
termination, he will receive credit for his prior accrued sick leave.

Section F. Offset. If the Crewmember is eligible to receive Temporary
------------------
Worker's Compensation benefits or State Disability benefits applicable to such
days of absence due to illness or injury, he shall be paid the difference
between such benefits and the daily sick leave benefit, in which event the debit
to the Crewmember's sick leave bank will be correspondingly reduced. Any debit
to a Crewmember's sick leave account will be computed to the nearest one (1)
hour.

Section G. Any Crewmember who becomes sick or injured while away from his
----------
Base shall be provided with proper medical attention and hospitalization, if
necessary, at Company expense and returned to his Base by the Company at the
earliest possible time. If such sickness or injury is not a result of causes
related to his occupation or to the living and health conditions of the area in
which the sickness or injury occurred, the Company may require full
reimbursement from the Crewmember's of all such expenses incurred, except for
normal transportation expenses.

Section H. No Crewmember shall be entitled to sick leave when sickness or
----------
injury is due to Crewmember's willful disregard of accepted safety practices,
willful intention to injure himself or another, sickness or injury while in the
employ of anyone else or the use of drugs.

Section I. Emergency Leave. Sick Leave may be utilized by the Crewmember
---------------------------
in the event the Crewmember suffers serious illness or a death in his immediate
family. Such emergency leave will normally be for a period of less than one (1)
week. Immediate family is defined as mother, father, spouse, children, brother,
sister, grandparents or foster parents of the Crewmember or others the Company
may approve. The Company will pay transportation to the emergency point or
domicile, whichever is closer.

Section J. The Company shall provide the Crewmember a statement annually,
----------
prior to January 27, setting forth his accrued sick leave to date. Additionally,
after each sick leave absence, a Crewmember may request in writing from the
Flight Operations Office a current statement of his sick leave account setting
forth the amount of sick leave utilized and the balance remaining in his sick
leave account. Such request shall be complied with in writing within fifteen
(15) days.

Section K. Medical Leave Status. When a Crewmember's sick leave bank has
--------------------------------
been exhausted and he is still unable to return to Active Status, he will
automatically be placed on medical leave of absence status.

ARTICLE IX

Leaves of Absence
-----------------

Section A Personal Leaves. When the requirements of the Company will
--------------------------
permit, a Crewmember may be granted a leave of absence without pay for a period
not to exceed one (1) year. Extensions of any such leave may be granted. Any
such leave or extension of same shall be in writing and the Company will provide
the Union with a copy. If any leave or extension of same would exceed a period
of one (1) year such leave or extension will be granted only upon the agreement
of the Company and the Union. When such leave is granted, the Crewmember shall
retain and shall continue to accrue seniority, provided that during such period
the Crewmember maintains his appropriate Crewmember's certificate or
certificates.

A pilot reaching mandatory retirement age for pilots, but not mandatory
retirement age for Flight Engineers or Second Officers, may, at his or her
option, elect to be placed on a personal leave of absence for up to eleven (11)
months. Return from such a leave will be at the Crewmember's option in
accordance with the procedures outlined in Article XI, Section A.5 (Voluntary
Furloughs).

Section B. Furlough Leaves. The Company will consider requests for leaves
---------------------------
for Crewmembers in the same Crew Class currently qualified on the same Type as
other Crewmembers in furlough status, so long as the granting of such leaves
does not entail any additional cost to the Company. Consent to any such request
shall not be unreasonably withheld. A Crewmember granted a leave of absence
pursuant to this Section will return from such leave as follows:

(l) He may exercise his seniority when a recall occurs, or

(2) He may exercise his seniority at the end of the awarded leave of
absence, or

(3) He may return from the leave of absence by exercising his
seniority after six (6) months from the effective date of his leave.

(4) An extension of a leave of absence will be treated as an
initiation of a leave and will re-establish a new effective date of the
leave.

16
<PAGE>

The Crewmember must provide the Company 45 days written notice of his intent to
return when exercising Paragraph 3. above. A Crewmember returning from a leave
of absence may return to the highest position permitted by his seniority at his
former Base that does not involve an upgrade unless a vacancy exists. He may
displace to another Base, if unable to hold his former position, as his
seniority permits. Crewmembers on a leave of absence will maintain a current
address with the Company and will respond to all master bids even though the
response is to continue the leave of absence.

Section C. Compensatory Leave. In the event the Company anticipates a
------------------------------
reduction/furlough, the Company may at its option grant leaves of absence to
Crewmembers at the rate of one-half (1/2) the Crewmembers present monthly
guarantee. Such leaves will be granted in seniority order through a bid posted
no later than ten (10) days from the date of the anticipated reduction/furlough.
Such leaves of absence will not be granted for periods in excess of sixty (60)
consecutive days. The Company may at its option and with the consent of the
Crewmember extend such leave. Crewmembers awarded a leave under the provisions
of this paragraph shall continue to accrue seniority, longevity and vacation
time. Medical and dental coverage will continue. Sick leave will not accrue. A
Crewmember awarded such leave will, with a ten (10) day written notice, be
subject to recurrent or proficiency training as directed by the Company.

Section D. Union Leave. A Crewmember shall be granted a leave of absence
-----------------------
without pay for a period up to three (3) years to accept a full time position
with the International Brotherhood of Teamsters, Airline Division, or with the
Federal Aviation Administration. Such leave of absence may be extended by
mutual agreement in one (1) year increments with a maximum of two (2) such
extensions, for a total of five (5) years. While on such leave of absence, the
Crewmember shall continue to accrue seniority. As a condition of his continued
employment with the Company as a Crewmember on leave of absence, he must
maintain all his certificates in a current status. No more than one (1)
Crewmember shall be permitted to be on such leave of absence at one time.

Section E. Medical Leave. When leaves without pay are granted on account
---------- -------------
of sickness or injury, a Crewmember shall retain and continue to accrue his
seniority whether or not he is able to maintain his appropriate Crewmember's
certificate or certificates required for his category until he is able to return
to duty or is found to be unfit for such duty, except that in no case shall
leave for sickness or injury exceed a total continuous period of five (5) years.
Return to duty after a leave granted under this Section shall be subject to a
reasonable qualifying period not to exceed six (6) months. During the period a
Crewmember is on leave not exceeding five (5) years, as provided above, the
Company may require the Crewmember to submit to a Company physical examination
no more frequently than six (6) month intervals. He will be required to submit
to such a physical examination to certify that he is able to return to work.
When such examination is scheduled by the Company at a location other than in
the immediate area of the Crewmember's residence, the Company shall furnish
transportation and pay reasonable actual expenses for the Crewmember, and shall
schedule such examination at the Crewmember's convenience.

Section F. Military Leave. Upon written request any Crewmember shall be
---------- --------------
granted military leave without pay as provided by effective Federal regulations
applying thereto. Upon return to active flight status, re-employment rights and
benefits shall be governed by and limited to the protection afforded in the
Universal Military Training and Service Act, as amended. A Crewmember on leave
of absence under this Section shall furnish the Company a copy of his orders to
military duty and release therefrom.

Section G. Conditions.
---------- -----------

1. A Crewmember on leave shall not, without prior written permission
of the Company, engage in aviation employment and, in no case, shall engage
in employment which may bring discredit upon the Company.

2. A Crewmember returning from leave of absence will be paid during
any necessary requalification period at the rate appropriate to the
Crewmember's Crew Class and Type.

ARTICLE X

Seniority
---------

Section A. Seniority shall govern Crewmember assignments as specifically
----------
set forth in Article VII, Vacations; Article XI, Furloughs; Article XII, Filling
of Vacancies; Article XIII, Training and Upgrading and Article XIV, Scheduling.
The following provisions will apply to Permanent Flight Engineers and Second
Officers over FAA Mandatory Age:

1. Such Crewmembers are listed on the Pilot's System Seniority List for
furlough and recall. Their bidding rights for vacancies, bid lines, days off,
and vacations are junior to the Prior Rights Flight Engineers and more senior
Crewmembers on the Pilot's System Seniority List working the Flight Engineer
position.

2. Any Permanent Flight Engineer meeting the minimum experience
requirements set forth in Article XIII, Section B.3(a) as modified by Section
B.3(b)(7) and the provisions of Article XII, Section E.3 may, during times
established by the Company, qualify as a First Officer provided his training is
successfully completed by June 30, 1988. Once qualified and awarded a bid as a
First Officer, such Crewmember will be designated as a First Officer and

17
<PAGE>

lose his status as a Permanent Flight Engineer. On any subsequent reduction in
force, such Crewmember may be reduced to Second Officer and will be paid
accordingly. Permanent Flight Engineers not availing themselves of the above
training, or not successfully completing said training by June 30, 1988, will
continue as Permanent Flight Engineers. A Permanent Flight Engineer is permitted
only one (1) attempt to qualify as a First Officer. Should the introduction of
aircraft with two (2) position cockpits necessitate the furlough of Flight
Engineers covered by the Prior Rights Cause, the Company and the Union will meet
to initiate a similar check out for such Crewmembers.

3. A Permanent Flight Engineer or a Second Officer over FAA Mandatory Age
may be furloughed out of seniority or not recalled in seniority order if there
is no vacancy for him to fill, or the Company may hire a new Pilot for such
position. For example: if the vacancy is a First Officer's position and the
next Crewmember to be recalled is a Permanent Flight Engineer or Second Officer
over FAA Mandatory Age, he may be bypassed and a Pilot junior to him recalled.

Section B. The Pilot Category Seniority List in effect at the time of
----------
execution of this Agreement is accepted as final and binding on all parties.
The Flight Engineer Category Seniority List in effect at the time of execution
of this Agreement is accepted as final and binding on all parties. Flight
Engineers hired after July 1, 1970 will be listed on the Pilot Category
Seniority List as Permanent Flight Engineers and such Permanent Flight
Engineers, as well as Second Officers over FAA Mandatory Age, shall have no
bidding or displacement rights to Captain or First Officer positions. The
Company is fully protected in relying on the published lists as of the time of
execution of this Agreement.

Section C. Within the first ten (10) days of January and the first ten
----------
(10) days of July, each year, the Company shall issue and post at each Company
Base a Crewmember Category Seniority List, compiled in accordance with this
Article. Such List shall be known as the Crewmember Category Seniority List and
shall contain the names of all Crewmembers by category entitled to seniority,
whether active or inactive, and the date the List becomes effective. The person
posting the List shall date and sign the List as of the date of posting and
shall Provide a copy to the Union.

1. All Crewmembers shall be listed on the Crewmember's Category
Seniority List, and each Crewmember shall be permitted a period of forty-
five (45) days after posting of such List in which to protest in writing to
the Company any omission or incorrect posting affecting his seniority.

2. In the event such Crewmember does not file a protest with the
Company within forty-five (45) days, he shall not thereafter be entitled to
file such protest.

For the convenience of the Crewmembers the Company will, on the day of posting,
place a copy of the Crewmember's Category Seniority List in the Crewmember's box
and will mail a copy to each Crewmember on sick leave, furlough, or leave of
absence to his home address on file with the Company.

Section D. Seniority position shall be determined by applying the
----------
following rules:

1. Seniority as a Crewmember by category shall be based upon the
length of service as a Crewmember in that category with the Company.

2. Seniority shall begin to accrue from the date a Crewmember is
first employed by the Company as a Crewmember and shall continue to accrue
during such Period of employment except as otherwise provided in this
Agreement. A Crewmember shall be considered as first employed on the date
he first enters ground school. When two (2) or more Crewmembers are
employed on the same date in the same Category, they shall be placed on
such Category Seniority List according to their age; i.e., the oldest
Crewmember shall receive the most senior position on the list.

3. Any Crewmember once having established a seniority date
hereunder shall not lose that date except as provided in this Agreement.

4. When a junior Crewmember is promoted over a senior Crewmember by
reason of the failure of the latter to qualify in his turn, the more senior
Crewmember shall continue to retain his position on the Crewmember Category
Seniority List.

5. Any Crewmember whose services with the Company are permanently severed
shall forfeit his seniority rights.

6. A Crewmember transferred to a non-flying or Management position shall
retain and continue to accrue seniority, provided that such Crewmember shall
maintain at all times a currently effective airman's certificate or certificates
required of Crewmembers in his category. If such Crewmember permits his
required certificate or certificates to lapse, he shall retain his seniority
already accrued to the date of such lapse. If such Crewmember again possesses
and maintains said airman's certificate or certificates within one (1) year of
the date of lapse, he shall again commence to accrue seniority from the date of
his current airmans certificate or certificates.

7. When a Crewmember is transferred to a non-flying or Management
position, as a result of sickness or injury, or becomes sick or injured while in
such non-flying or Management position, he shall retain and continue to accrue
his seniority during such period of sickness or injury, whether or not he is
able to maintain his certificates required for his status, until he is again
able to return to flying duty or is found to be unfit for such duty for the
period set forth in Article IX, Section E.

8. If a Crewmember mentioned in 6 and 7 above returns to flying duty, he shall
exercise his seniority at the Base to which he was assigned immediately prior
to the leave or assignment, to displace

18
<PAGE>

the most junior Crewmember in his Crew Class, provided he has sufficient
seniority. If his seniority will not permit him to displace at his Base, he will
displace at any other Base where he may have seniority.

9. All of the seniority lists shall contain the following information:

(a) The date of the list;

(b) The category identification of the list, i.e., pilot or flight engineer;

(c) Seniority numbers;
(d) Crewmembers' names;
(e) Current aircraft assignment;
(f) Status (crew class);
(g) Check or management status;
(h) Date of hire;
(i) Birth date.

Section E. Crewmembers shall be on probation until they have accumulated
---------
twelve (12) months of Active Service as a Crewmember with the Company. During
this period, such Crewmembers will be placed on the Seniority List, but do not
accrue seniority and may be discharged or disciplined without recourse to the
Grievance Procedure. At the completion of such probationary period, the
seniority shall date back to the date of hire. All time spent by a newly hired
Crewmember in training or probationary periods shall be cumulative. A
probationary Crewmember may bid any vacancy. However, during the probationary
period, the Company may hold the probationary Crewmember in his position and/or
Base. The Company will have six (6) months Active Service following the
Crewmember's completion of his probationary prior to train him for the position
he could have held had he been permitted to exercise his seniority. Should the
Company not use the Crewmember in his rightful position, the Company will pay
him the rate of such position after the Crewmember has completed twenty-one (21)
months of Active Service. A probationary Crewmember furloughed or terminated
during his probationary period shall upon recall complete his twelve (12) month
probationary period or forty-five (45) days from the date of his return to
service, whichever is later; however, previous Active Service will be
accumulated for all pay and benefits.

Crewmembers hired after the date of the signing of this agreement shall be
on probation from their date of hire until they have accumulated twelve (12)
months of active service following the completion of their initial simulator
training. All other pay and benefits will be based on the completion of twelve
(12) months of active service from date of hire.

ARTICLE XI

Reduction, Furlough, Recall
---------------------------
Section A. Reduction and Furlough.
-----------------------------------

1. Reduction shall mean less positions in any Crew Class and Type as
required by the Company at any of its Bases. When a reduction becomes
necessary, the following procedures shall apply:

(a) The Company shall notify the least senior Crewmember in the Crew
Class in the Category to be reduced, in the Type to be reduced, and at the
Base where such reduction is to take place. Such notification will list
the names of other Crewmembers to be reduced in the same reduction. The
Company, on the notice form, will estimate the expected length of the
reduction with the understanding that the Company is not bound by the
estimate made. Such notice shall be posted at each station.

(b) The notification of reduction shall be in writing and the
effective date of the reduction shall be a date designated by the Company
in the notice but not less than fifteen (15) days from the date the Company
sends the notice. Notification shall be by registered or certified mail,
return receipt, mailed from the Crewmember's Base or hand-delivered to him
and receipted by him. The time of receipt by the sender's local post
office will apply for the time limits specified. If a Crewmember is away
from his Base on a trip at the time that the Company sends him a
notification of reduction, the Company will, within seventy-two (72) hours,
inform him at a layover point of the sending of his notification of
reduction, unless prevented from doing so by communications problems. In
the event such notification is delayed beyond the seventy-two (72) hours,
the Crewmember's ten (10) day notification as provided in paragraph 2
below shall be tolled from the actual time he receives such notification.

2. A Crewmember notified that he is being reduced shall, within ten (10)
days following such notification, notify the Company in writing of his desire to
exercise his seniority to displace a less senior Crewmember in his Category or
of his desire to be furloughed irrespective of his seniority. If the
Crewmember does

19
<PAGE>

not notify the Company, the Company shall assign him a position to which his
seniority would permit him to displace and he will thereby be deemed to have
elected to exercise his seniority to displace. The notification to the Company
shall be in writing addressed to the Vice President, Operations, Herndon, and
shall be (1) certified or registered mail, return receipt, or (2) telegram, or
(3) duplicate type TWX

3. In the event the Crewmember notified of reduction does not notify
the Company of his desire to exercise his seniority within ten (10) days of
notification as provided in paragraph 1(b) of this Section, he shall be
assigned by the Company as set forth in A.2 above. If he does not possess
sufficient seniority to displace another Crewmember, he shall be placed on
furlough status as of the effective date stipulated in the reduction notice. In
the event Crewmembers who have sufficient seniority to displace to another Base
opt to furlough instead and such action results in fewer Crewmembers at a Base,
in a Category, than are needed at such Base, the Company will, through the
recall procedure assign such positions to Crewmembers in the Category needed in
seniority order from Crewmembers in such category already on furlough. If there
is no Crewmember junior to the Crewmember in his Category to fill the position
required, the Crewmember may not exercise the furlough option. The Crewmember
who is placed on furlough status as a result of exercising this option may,
subject to his seniority, be assigned to another Base in a subsequent recall.

4. A Crewmember displaced by another Crewmember as a result of the
application of paragraph 2 of this Section shall be notified of such
displacement and his reduction in accordance with paragraph 1, and shall be
afforded the rights granted in paragraphs 2 and 3.

5. A crewmember who, as a result of the procedure set forth in this
Section, chooses furlough status rather than exercise his seniority, shall be
recalled from furlough in the following manner:

(a) He may exercise his seniority when a recall occurs, or
(b) He may exercise his seniority after six (6) months from his
effective furlough date.
(c) An extension of furlough will be treated as an initiation of
furlough and will re-establish a new effective furlough date.

A Crewmember exercising sub-paragraph (b) of this paragraph must provide the
Company 45 days written notice of his intent to return. A Crewmember returning
from a furlough under paragraph (b) may return to the highest position permitted
by his seniority at his former Base that does not involve an upgrade unless a
vacancy exists. He may displace to another Base, if unable to hold his former
position, as his seniority permits. Crewmembers on voluntary furlough will
maintain a current address with the Company and will respond to all Master Bids
even though the response is to continue the voluntary furlough.

6. A Crewmember based at an International Base who is to be placed on
furlough status as a result of the operation of paragraph 3 of this Section
will be entitled to the last four (4) days at his International Base free from
all duty.

7. A Crewmember who is away from his Base on the effective date
stipulated in the reduction notice and who is to be furloughed shall be
permitted to continue his trip until his return to his Base and shall be deemed
to have been furloughed in accordance with the seniority provisions herein so
long as his date of return to his Base is not more than five (5) days after the
date stipulated in the reduction notice.

8. A Crewmember shall continue to accrue seniority on the System
Seniority List for a maximum of seven (7) years after the date of his most
recent furlough. Furloughed Crewmembers' names will continue to be shown on the
System Seniority Lists. When a furloughed Crewmember's name appears on a
Seniority List, he shall be identified as being on furlough.

9. A notification of reduction once issued may be canceled by a written
notice prior to its effective date. Any subsequent reduction must be conducted
as provided in paragraph 1 of this Section.

10. In the event the Crewmember remains on active duty status beyond the
effective date of the notification of reduction which results in his furlough,
or the time period provided in paragraph 7 of this Section, whichever comes
later, he and all affected Crewmembers more senior to him who are scheduled to
be placed on furlough status will be entitled to a new effective date of
furlough with not less than ten (10) days notice.

11. The time of notification as outlined in subparagraph (f) of this
Section will be reduced to seven (7) days when a furlough becomes necessary for
reason resulting from a strike, work stoppage, national war emergency,
revocation by government agency of the Company's operating certificate or
certificates, or grounding of Company aircraft by government order.

Section B. Recall.
-------------------

All recalls of furloughed Crewmembers shall be accomplished through the
following procedure:

1. Crewmembers on furlough shall be recalled in the order of System
Category Seniority. The recall shall be accomplished in such manner that
Crewmembers who have been reduced and those being recalled from furlough are
able to exercise System Seniority to the Type Category, Crew Class and Base to
which their respective Seniority would entitle them, subject, however to the
Flight Engineers' Prior Rights Clause. Vacancies as a result of such expansion
shall be bid as provided in Article XII. It is understood that in the
implementation of this procedure, the

20
<PAGE>

Company may, when operations require, have a period of not to exceed seventy-
five (75) days to qualify and assign the Crewmember to his awarded position if
such Crewmember requires upgrading or transition training.

2. A Crewmember's notice of recall from furlough shall be in writing,
by certified or registered mail, return receipt, to the Crewmember's last
address on file with the Company. The time of receipt by the sender's local
post office will apply for the time limits specified in this paragraph. The
Crewmember shall reply to the Company within ten (10) days of the recall notice
in writing, by certified or registered mail, return receipt. If he accepts the
recall, he shall present himself to the Company prepared to return to duty
within twenty-one (21) days of the recall notice. However, it shall not be a
violation of this Agreement to permit a junior Crewmember to return to active
duty within such twenty-one (21) day period if he desires to do so and the
Crewmembers more senior to him do not desire to do so, except as provided in
paragraph 4 of this Section. Should a Crewmember be unable to report within the
twenty-one (21) days specified above, after accepting recall, he shall be
considered to have waived all his rights under this Agreement unless there is a
reason beyond his control for his inability to report.

3. A Crewmember shall not be required to accept a recall if a more
junior Crewmember is still on furlough. A Crewmember must honor a recall if he
is not on a leave of absence and there are no Crewmembers junior to him on
furlough. A recall shall be for a minimum of sixty (60) days.

4. Newly hired Crewmembers may not fly on the line until Crewmembers
senior to them have exercised their seniority and are flying the line. However,
the Company may train newly hired Crewmembers and Crewmembers recalled from
furlough prior to the more senior Crewmembers exercising their seniority. This
applies to ground training and check rides only and specifically does not permit
the more junior Crewmember to be assigned to the line prior to the more senior
Crewmember whose status as far as training is concerned, is current. It is
understood that this paragraph does not prevent a junior Crewmember (exclusive
of new hires) from flying the line while a more senior Crewmember is exercising
the option Provided in paragraph 1 of this Section.

5. It shall be the Crewmember's responsibility to keep the Company
informed of his correct address.

6. The Company shall be released from all obligation to recall a
furloughed Crewmember after the Crewmember has been on furlough for seven (7)
years. A Crewmember shall lose all rights and privileges under this or
succeeding Agreements after having been on furlough for seven (7) years, or if
he fails to respond to a notice of recall within ten (10) days, or if he fails
to report within twenty-one (21) days unless there is a reason beyond his
control for his inability to report.

Section C. General.
-------------------

1. A Crewmember based outside the continental limits of the United
States at the time of furlough shall not be considered to be furloughed until he
and his family have been returned to the Crewmember's last domestic residence
location. The Crewmember will be required to accept Company arranged air
transportation to the United States after his four (4) day duty-free period as
provided in Section A, paragraph 7. A Crewmember, however may elect to remain
at his International Base while on furlough, in which case he will not receive
compensation beyond the notice period provided in Section A. In the event such
Crewmember and his family have been returned to the United States, but his
furniture and household effects have not been returned to the Crewmember' last
domestic residence location, such Crewmember shall continue to receive expenses
for himself and such member of his immediate family involved in the move at the
rate of Twenty-five dollars ($25.00) per day for the Crewmember and Twenty-five
dollars ($25.00) per day for his spouse and Fifteen dollars ($15.00) per day for
each family member thereafter to a maximum of One Hundred Ten dollars ($110.00)
per day until such time as his furniture and household effects are returned.

2. A reduced Crewmember shall be offered whatever training and
certification is required to displace the junior Crewmember, subject to the
provisions of Article XIII, Training and Upgrading.

3. When a reduction occurs within a Base, any temporary bid holders or
temporary assignees will be reduced before any permanent position holder.

Section D. CRAF Crewing. The Company shall not furlough those crews
-------------------------
required to enable the Company to crew all WOA aircraft committed to the CRAF
program used to calculate the basic AMC contract awards plus expansion business
to the four (4) crew level (or prevailing requirement level) plus drilling
reservists. The Company will advise the Union of the number of such aircraft
and it will update the Union whenever changes occur. Further, the Company will
provide the Union semi-annually with a list of the CRAF crews and drilling
reservists by name.

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<PAGE>

ARTICLE XII

Filling of Vacancies
--------------------

Section A. A vacancy shall mean additional Positions in any Category and
----------
Crew Class, Type and Base as required by the Company. Section B. Any
----------
vacancies in Category and Crew Class, Type and Base shall be filled in
accordance with the following procedure:

1. The Company shall determine the number of positions available, and
shall, as a result, make additions to positions or increases of position in
Category and Crew Class, Type and Base.

2. The Company will post bulletins announcing such vacancies, stating the
effective date the additional positions will exist, the Category and Crew Class,
the Type and the Base and whether the Base is permanent or temporary and where
the Crewmember will be domiciled in the case of a permanent or a temporary Base.

3. A copy of such bulletin shall be posted at each Base and a copy mailed
to all Crewmembers, except furloughed Crewmembers who are not being recalled in
conjunction with the announcement. A copy will be mailed to a Crewmember's
vacation or leave of absence address if the Crewmember has filed with the
Company his vacation or leave address. If a Crewmember is away from his Base on
trip at the time of posting of the bulletin the Company will, within seventy-two
(72) hours, inform him at the layover point of the posting of the bulletin
unless prevented from doing so by communication problems. If such notification
is delayed beyond the seventy-two (72) hours, the time period for bid by the
Crewmember will be the later of the time set forth in paragraph 4 or five (5)
days after the receipt of the notification.

4. The bulletin shall stipulate a date and time, indicating a deadline for
Crewmember bids for such positions, which time shall not be less than ten (10)
days after the date such bulletin is posted at all Company Bases and copies have
been mailed as provided in Paragraph 3. All such bulletins shall be numbered
consecutively during a calendar year.

5. All bids shall be made on forms provided and directed to the office of
the Director of Operations in Herndon. Every bid submitted will become a
"standing bid on file" and will be used for all subsequent bids until a new bid
sheet is received. A new bid form may be submitted at any time after the final
results are posted of a previously closed bid, thereby updating the "standing
bid on file". A supply of these bid forms will be available at all Bases. For
purposes of the time limit set forth in paragraph 4 in this section, a duplicate
telex or a telegram before the bid closing will be sufficient, provided the bid
form is also postmarked prior to the time of the bid closing or hand-delivered
and receipts by a Company representative prior to the time of bid closing.

6. A bulletin announcing the results of all bidding for, or assignment
to, vacancies shall be posted at all Company Bases within ten (10) days after
the specified deadline and shall refer to the bulletin number which announced
such vacancy. Such bulletin shall state the effective date, the Base, Crew
Class and Type, and the name and seniority number of the successful bidder or
Crewmember assigned.

7. Those Crewmembers holding Crew Class, Type and Base positions as of the
effective date of this Agreement shall continue to hold such positions. Any
changes in Crew Class, Type or Base made after the effective date of this
Agreement shall be in accordance with the procedures set forth in this
Agreement.

8. (a) When mutually agreed to by the Company and the Union, a Master Bid
may be utilized. A Master Bid is defined as a bid which includes projected
vacancies for more than one Type of equipment, Base and/or which covers an
extended period of time.

(b) On a Master Bid, all Crewmembers will submit bids. The crewmember
may list multiple choices on his bid such as DC-10 Captain, DC-8 Captain, DC-10
First Officer, etc. A Crewmember who is not displaced and who bids a position
on a Master Bid that displaces a more junior Crewmember will be frozen in such
position for a period of eighteen (18) months from the effective award date.
The freeze will be waived where a Crewmember may subsequently bid a new Base or
a Crew Class position or Type that pays a higher hourly rate. The Company may
not waive this freeze on a subsequent bid unless mutually agreed to with the
Union. The Bid need not be his first choice for such consideration. The bid of
a more senior displaced Crewmember will have precedence over a Crewmember's bid
to retain his current position and Base. When awarding the bids, the Company
will award the Crewmember's choice commensurate with his seniority. Should the
Crewmember be unable to hold any of his choices, the Company will assign him a
position commensurate with his seniority after all bids have been awarded.

(c) Bids issued subsequent to the Master Bid, but prior to the
completion of all Master Bid training, will be considered a part of the Master
Bid. A Crewmember having completed initial training on equipment or having
moved to a new Base as the result of a regular bid or Master Bid, will not be
eligible to bid a subsequent bid until he has satisfied the requirements of
Section E of this Article. A Crewmember who has commenced training as the
result of a regular bid or Master Bid may not bid on a subsequent bid until he
has satisfied the requirements of Section E of this Article. A Crewmember who
has commenced or completed training as the result of regular bid or Master Bid
will be permitted to exercise his seniority and displacement rights should his
position become surplus.

9. The Company and the Union may agree to a Standing Bid procedure.

Section C. When the Company establishes a new Base, it will post the
----------
expected time of activation on the Crewmember bulletin boards at each Base.
Such bulletin will state whether the

22
<PAGE>

Base is permanent or temporary and if the positions at such Base are to be
permanent or temporary and will be posted no less than thirty (30) days prior to
the activation of such Base, A new Base includes the assignment of a different
type of equipment to an existing Base, Such positions will be bulletined as
provided in Section B.

Section D. Vacancies will be awarded in Category seniority order among
----------
those Crewmembers who are eligible to bid, The vacancies shall be filled by the
Senior Crewmembers who bid such vacancies and qualify, to the extent necessary,
pursuant to the requirements of Article XIII. If there are insufficient numbers
of eligible bidders, the Company will assign, in reverse order of Category
seniority, Crewmembers on the active payroll (including those Crewmembers, if
any, notified of recall simultaneously with the bulletining of such vacancies).

Section E. 1. A Crewmember is not eligible to bid on any type of aircraft
----------
other than the type he is flying unless he has completed twelve (12) months of
Active Service flying in his Crew Class on his Type at the time of the bidding.
This provision shall not apply in the case of any Crewmember who has received
notice of reduction in his Crew Class, in which case he may fully exercise his
seniority rights. The Company, in bulletining any vacancy, may waive this
provision provided the waiver is stated in the bulletin.

2. Any Crewmember who (1) is successful bidder for any Base and is
reimbursed for moving expenses under the provisions of Article VI, or is in his
probationary period, will not be eligible to bid on a vacancy at another Base
for an eighteen (18) month period. A Crewmember awarded a Base bid and who is
not reimbursed by the Company for his moving expenses as provided by Article VI
will not be frozen. The Company in bulletining any vacancy may waive this
provision provided the waiver is stated in the bulletin. This provision shall
not apply in the case of a Crewmember who subsequently receives notification of
reduction or who is the successful bidder for upgrade in crew class at any Base.

3. The Company may, at its discretion, deny the award to a bid to:

(a) Captains who will have attained the age of fifty-eight (58) at the
anticipated time of completion of training as Captain on another Type.

(b) First Officers who will have attained the age of fifty-eight (58) at
the anticipated time of completion of training as First Officers on another
Type.

(c) First Officers who will have attained the age of fifty-eight (58) at
the anticipated time of completion of training for a Captain vacancy.

(d) Provided he bid for the vacancy and was denied such bid award due to
age, a Captain or a First Officer held to a lower-paid Type will receive the pay
for the higher-paid Type to which his seniority would have entitled him from the
date a Crewmember junior to him, who was awarded such bid at the time the more
senior Crewmember was denied, begins receiving the pay for the higher-paid Type
or equipment. Such pay will include the guarantee, the hourly rate and other
pay items reflective of the hourly rate.

(e) First Officer who is denied a bid for a Captain vacancy, as provided
in Paragraph (c) above, is not entitled to Captain's pay.

(f) Should the Company award a Crewmember who will have attained the age of
fifty-eight (58) at the anticipated time of completion of training his
desired bid, the provisions of Article XIII shall apply. It is understood
that the then current mandatory age (less 2 years) will be substituted for
age 58 in (a), (b) and (c), above.

4. Should the FARs be modified or reinterpreted permitting pilots to
exercise their certificates as an airline transport pilot after age 60, the
following procedures will apply:

(a) Those pilots having left the seniority list will be considered as new
hires should they return to the employ of the Company.

(b) Those pilots having downgraded to Second Officer, taken a leave of
absence or voluntary furlough, or on sick leave, but remaining on the seniority
list, and who require only recurrent training will be provided such training and
permitted to exercise their seniority as regards crew class, type, and base
within 45 days of receipt of notification in writing by the Company of such rule
change.

(c) Those pilots requiring more than one recurrent training will be
provided such training and permitted to exercise their seniority as regards crew
class, type, and base within 100 days of such notification by the Company.

Section F.
----------

1. A Temporary Base is a Base established by the Company for a period of
at least thirty (30) days and not more than ninety (90) days. If for good and
sufficient reason, it is necessary that the Temporary Base exceed such ninety
(90) day limitation, with concurrence by the Union, the Company may establish
the Base for an additional period not to exceed thirty (30) days. The Union
will not unreasonably withhold such concurrence.

2. Vacancies for such Temporary Base will be bulletined as provided by
Section B. Bids will be awards in order of category seniority to Crewmembers on
the active payroll (including those Crewmembers, if any, notified of recall
simultaneously with the bulletining of such vacancies) while are qualified in
Crew Class on the type of equipment to be flown at such Temporary Base. If
there are insufficient bidders for any vacancies at a Temporary Base, the
Company will assign, in reverse order of seniority, for the duration of such
Temporary Base, Crewmembers on the active payroll (including those Crewmembers,
if any, notified of recall simultaneously with the bulletining of such
vacancies) who are qualified in Crew Class on the type of equipment to be flown
at

23
<PAGE>

such Temporary Base. A Crewmember who requires only landings, proficiency
check, or recurrent training, shall receive such qualification. A Crewmember
once qualified on Type and in Crew Class shall be considered qualified for the
purposes of this Agreement, if he has flown on such Type and Crew Class within
the preceding twelve (12) months.

Section G. 1. A temporary position is a Position at any Base (permanent
----------
or temporary) that is expected to exceed thirty (30) days, but will not exceed
ninety (90) days.

2. The Temporary position shall be bid as Provided in Section B. The
most senior qualified Crewmember on the active payroll at the Base where the
vacancy exists who bids shall be awarded the temporary position or, if not
filled in this manner, any qualified Crewmember in the service of the Company
who bids shall be awarded the temporary position in seniority order. If there
are no qualified bidders, the Crewmember on active payroll who possesses the
necessary qualifications shall be assigned in reverse order of seniority. A
Crewmember who requires only landings, proficiency check or recurrent training
shall receive such qualification. A Crewmember once qualified on Type and in
Crew Class shall be considered qualified for the purposes of this paragraph, if
he has flown on such Type and Crew Class within the preceding twelve (12)
months.

3. A temporary position which continues for as much as sixty (60) days
will at that time be reviewed and if it is then anticipated that such position
will exceed an additional thirty (30) days, the position will be bulletined for
bid as a permanent position.

Section H.
----------

1. A Crewmember awarded a bid or assigned to a Temporary Base or a
temporary position may be required to complete such assignment, but he will not
forfeit any bidding rights.

2. A Crewmember awarded a temporary position or assigned to a temporary
position at any Base will be entitled to the same rights as other Crewmembers in
his assigned Crew Class and Type at the Base of his temporary position.

3. A Crewmember awarded a position at a Temporary Base or a temporary
position or assigned to a Temporary Base or assigned to a temporary position
will revert to his former Base, Type and Crew Class upon completion of such
assignment, unless such position has been deleted, in which case he may exercise
his seniority.

4. A Crewmember awarded or assigned a position at a Temporary Base and a
Crewmember awarded or assigned temporary position at any Base (permanent or
temporary) other than his home Base, will receive the hourly per diem as
provided by Article IV, Section A, computed from the time he leaves his home
Base for such assignment until his return to his home Base at the end of such
assignment, although such Crewmember will receive no additional per diem
payments applicable to flights away from such Base, except that the Company will
pay the additional cost of lodging for the Crewmember when he is on layover away
from such Base and the Company will provide ground transportation at such Base
as provided in Article IV, Section C.

5. A Crewmember filling a temporary position a any foreign Base shall not
receive the cost of living allowance, if any, applicable at such foreign Base.

6. In the event a Crewmember on assignment to Temporary Base or to a
temporary position at a Base other than his home Base wishes to transport his
immediate family to such Base, the Company shall cooperate in endeavoring to
furnish gratuitous or reduced fare air transportation. All other costs of
transportation, maintenance or other living expenses shall be borne by the
Crewmember and the Company shall have no responsibility therefore.

7. Prior to establishing a temporary Base, the Company shall consult with
the Union on Temporary Base problems, including hotel arrangements.

8. Upon returning from a temporary position the Crewmember shall receive
one (1) day off free from a duties for each ten (10) days, or major fraction
thereof he was away from his home Base with a maximum of seven (7) days off.
Such days off may be a part of his 144 Consecutive Hours Off period or his
earned twelve 24-hour periods off if these have not been already taken.

9. The parties understand that Crewmembers who may be required to accept
assignment to temporary positions desire to continue to fly from their permanent
Base on a rotating crew basis. When establishing a Temporary Base, the Company
will consider crewing it in the following manner:

(a) Crewing out of the permanent Bases;

(b) Rotating Crewmembers out of the permanent Bases;

(c) Establishing a Temporary Base. Should the first two methods not appear
feasible, the Company will meet with the Union as to the best method of crewing
the Base. The Company will not be unreasonable in its application of this
Section.

10. When the required number of temporary positions in any one Type and
Crew Class at a Base is reduced, Crewmembers in that Type and Crew Class who
have been assigned to temporary positions at that Base will be offered return to
their domicile in order of seniority, the most senior assigned Crewmember per
Crew Class to be first offered; next those Crewmembers in that Type and Crew
Class who bid temporary positions at that Base will be offered, in seniority
order, any remaining returns to their domicile. If after each Crewmember
filling a temporary position at a Base has been offered a return to domicile and
reductions in temporary positions are still necessary, the Company shall fill
the remaining reductions in inverse seniority order beginning with assigned
Crewmembers. Should scheduling or utilization factors so dictate, the Company
shall have three days

24
<PAGE>

(72 hours) from the departure for domicile from the Base of temporary position
of a junior Crewmember, within which to position a more senior Crewmember to the
Base of temporary position in preparation for return to domicile.

ARTICLE XIII

Training and Upgrading
----------------------
Section A. General.
--------------------

1. A Crewmember shall receive at least forty-eight (48) hours' advance
notice of all ground and simulator training except that this time may be
shortened if the Crewmember consents.

2. A Crewmember, except a new hire during initial training, who is
assigned to a ground school training program involving five (5) or more days of
training shall be given one (1) period of forty-eight (48) consecutive hours
free from all duty with the Company at his Base or at the base at which he is
undergoing training during any seven (7) consecutive days assigned to such
training. Simulator and flight training will not be scheduled for more than six
(6) periods in seven (7) days. After completion of the fourth simulator period
the Crewmember may elect to take forty-eight (48) consecutive hours free of duty
after his fifth period. Upon completion of the simulator training program and
prior to commencing his line check, in lieu of a scheduled duty free forty-eight
(48) hour period, the Crewmember shall be given two (2) calendar days free from
all duty with the Company at his Base prior to resuming any flying duties or any
additional training duties. When aircraft training and/or check is required,
after simulator training and Prior to the line check, it may be scheduled prior
to or after the two (2) calendar days free of all duty. Such Crewmember shall
be given the opportunity to use all pass and discount privileges to his Base, to
be used at his option, during any such duty free period.

3. Simulator training or check periods shall not be scheduled to exceed
four (4) hours per day with a maximum of two (2) hours at the Crewmember's
respective position. On flight training or check period the Pilot will not
spend more than three (3) hours at his respective Position except on FAA check
flights and the Flight Engineer shall not spend more than two (2) hours at his
respective position except on FAA check flights.

4. A Crewmember will not be scheduled for more than eight (8) classroom
hours per day on a five (5) day week basis during the ground school portion of
his type upgrading or recurrent training.

5. Duty periods for a Crewmember assigned to a ground school training
program shall not be scheduled for more than eight (8) hours on duty, such duty
period shall commence at the required reporting time, or the actual reporting
time, whichever is later, and run continuously except for a one (1) hour lunch
break. When ground training is other than regular ground school training and is
conducted at other than a Company training facility, the Crewmember shall not be
scheduled for more than twelve (12) hours on duty with such training conducted
only during the first ten (10) hours of the duty period.

6. Training for any additional qualifications required by the Company or
the FAA by the Crewmembers covered by this Agreement shall be made available by
the Company at Company expense, except as provided in Article XII, Section E.4.

7. When a Crewmember is assigned to upgrading or type qualification
training, such training shall proceed to completion within one hundred (100)
calendar days from the date ground school is scheduled to begin as specified in
the bid notice, or the date ground school actually begins, whichever is later.
It is understood that in the event requirements change, the Company may
discontinue upgrading training at any point in their program. It is further
understood that line checks are excluded from the one hundred (100) days
specified above. It is further understood that a Crewmember's training may not
be interrupted by regular flying duties or other assignments unless the flight
cannot be otherwise protected. In the event any training is missed, it shall be
made up prior to the continuation of training.

8. No Crewmember shall be graded on any training, maneuvers or procedures
except as required by the FAA and the Company's FAA-approved training manual.

9. Each Crewmember may review his performance and grading sheet at the
conclusion of each training or check period. A copy of his training record will
be furnished him at the conclusion of each training course or check period.

Section B. Qualifications.
---------- ---------------

1. Crewmembers must meet all FAA qualifications and license requirements
applicable to his Crew Class and Type.

2. Category seniority will govern the filling of all Crew Class and Type
vacancies on all equipment operated by the Company

3. Minimum experience requirements for hiring and bidding are as set forth
below:

25
<PAGE>

(a) HIRING REQUIREMENTS: First or Second Officers: Commercial License,
Instrument and Multiengine Ratings; Flight Engineer License; First-class Medical
(FAA); satisfactory completion of Stanine Rating Exam; 3,000 hours pilot
experience. (Company may reduce experience requirements as conditions warrant.)

(b) CAPTAIN UPGRADING REQUIREMENTS: (1) Airline Transport Rating
(written portion); (2) 5,000 hours flight experience, or thirty (30)
months active flying as a First Officer on World Airways equipment.

(3) 1,000 hours flight experience, or twelve (12) months active
flying as a Captain on World Airways equipment, or 1,000 hours or twelve
(12) months active flying as First Officer on the equipment he is bidding.

(4) A month of active flying is any calendar month in which the
Crewmember is available for active flying fifteen (15) days or more.

(5) In the event there is not a sufficient number of bidders to
fill the bulletined vacancies, Crewmembers meeting the qualifications for
bidding will be assigned in reverse order of seniority. If there are
insufficient Crewmembers who meet the requirements, the Company will meet
with the Professional Standards Committee and agree upon an ad hoc method
of filling vacancies.

(6) The Company may reduce the upgrading requirements equally
applicable to all Crewmembers in any bulletin of vacancy.

(7) Second Officer flight experience will be credited at the rate of
one-half (1/2) hour for each one (l) hour, not to exceed fifty percent (50%) of
the First Officer experience requirements set forth in paragraphs (2) and (3)
above.

4. When a successful bidder fails to qualify a specified in this Article,
he shall forthwith be returned to his former Base, Category, Crew Class and Type
notwithstanding the provisions of Article X, Seniority, and Article XII, Filling
of Vacancies, and he will be given training as necessary to requalify. When a
Crewmember cannot be returned to his former Crew Class and Type because such
Type has been phased out, or his former Base because it has been closed or
curtailed, he shall be given the training outlined in this Article to qualify
him for a Crew Class in his Category.

Section C. Training.
---------------------

1. Initial Training. Newly hired Crewmembers meeting the minimum
----------------
qualifications for employment will present their flight records for review and
will be assigned training in accordance with the World Airways, Inc. approved
Training Manual. Training will consist of ground school, simulator and flight
training and will be completed in that order. Students will be assigned ground
school courses in accordance with their experience and hours will be varied in
view of their recent aircraft experience. Ground school training will be
provided commensurate with their experience and within the general framework of
the approved training program. The daily schedules may be altered as required
within the approved program. Students will complete ground school successfully
before proceeding onto the simulator phase and the simulator phase must be
completed successfully before beginning the flight phase. Students failing to
complete any phase or part of a given phase of training will have their records
reviewed and will be given additional training or will be dropped from the
course, depending on the progress of the individual and the recommendations of
the instructors.

2. Recurrent Training.
-------------------

(a) Recurrent ground school will be successfully completed prior to
administering cockpit procedures trainer/cockpit systems simulator or
simulator training and/or proficiency check. The aircraft landing portion
of the proficiency check may be administered prior to the simulator check
at the Crewmember's option. Crewmembers shall receive their proficiency
checks no earlier than one (1) month prior to or no later than one (1)
month after their anniversary month. Captains and Flight Engineers shall
complete a line check once each twelve (12) calendar months. This check
may be given during the period one (1) month before to one (1) month
following the anniversary month. A Crewmember will be specifically advised
as to the reason whenever a check is scheduled during other than the above
stated periods. If the proficiency check is scheduled for one (1) two (2)
hour period and progress is unsatisfactory, this period will be considered
a training period and a two-hour check period will be scheduled
subsequently.

(b) A Crewmember (except probationary employees) failing to
complete any portion of his recurrent ground school, simulator or flight
training or proficiency checks, will have his failure reviewed to
determine what, if any, additional training is appropriate. A union
representative, a Company representative and the Crewmember shall review
the failure jointly (in person or by teleconferencing) and may recommend
additional training appropriate to the individual. It is assumed that in
most situations, some additional training will be provided in order for a
Professional Standards representative to observe such training.

(c) Any subsequent simulator or flight training period may be
considered the recheck at the discretion of the check Crewmember. If the
Crewmember fails his recheck, the Company shall consult with him and a
representative or representatives of the Professional Standards Committee
before determining the disposition of his case. The Company will provide
the Crewmember with a copy of his proficiency reports.

26
<PAGE>

3. Upgrade Training. All vacancies for upgrading will be bid in
-----------------
accordance with the provisions of Article XII, Filling of Vacancies.

(a) First Officer to Captain. A First Officer who is upgrading
-------------------------
will be given the training as prescribed in the FAA approved Company
Training Manual for the type of aircraft on which he is qualifying. The
training shall consist of the (a) appropriate ground school, (b) simulator
and (c) flight training on the aircraft. The daily schedule of the
prescribed ground school may be altered as required, depending on
availability of instructors, appropriate classrooms, etc., as long as the
student receives the complete outline of training prescribed. He shall be
required to satisfactorily complete each phase of the training prior to
beginning the second or third phase as appropriate. The student's progress
will be reviewed constantly to determine his progress through each phase of
the course and the student will be made aware of any lack of progress. A
student failing to progress satisfactorily or failing in any phase will
have his case treated as provided in Paragraph (f), Rechecks of this
subsection. Failing to qualify after a recheck, he shall be treated as
provided in Section B. 4, of this Article. The Company will determine the
disposition of a First Officer who has failed two upgrading attempts.

(b) Second Officer to First Officer. Ground school, oral
--------------------------------
examinations, simulator and flight training will meet no less than the
minimum requirements of the FAA. A Second Officer failing upgrading
training shall be treated as provided in paragraph (f), Rechecks of this
Subsection. Failing to qualify after a recheck, he shall be treated as
provided in Section B.4 of this Article. The Company will determine the
disposition of a Second Officer who has failed two upgrading attempts under
this paragraph.

(c) Captain or First Officer to Second Officer at Mandatory
-------------------------------------------------------
Retirement Age. Ground school, oral examinations, simulator and flight
---------------
training will meet no less than the minimum requirements of the FAA. A
Pilot on first attaining mandatory retirement age and failing
qualification for Second Officer shall be treated as in Paragraph (f),
Rechecks of this Subsection. Failing to qualify after recheck, he shall
be treated as determined by the Company.

(d) Other Transitioning. Such training shall meet no less than
--------------------
the minimum standards of the FAA. Should a Crewmember fail such training,
he shall be treated as provided in Paragraph (f), Rechecks, of this
Subsection. Failing to qualify after a recheck, he shall be treated as
provided in Section B.4. of this Article. The Company shall determine the
disposition of a Crewmember failing the second attempt at such transition.

(e) Type Rating. The Company may, with the concurrence of the
------------
Union, make available a type rating in connection with a First Officer
transitioning or upgrading program. The Crewmember may, at his option
request to train for such type rating. The Crewmember will be briefed as
to his progress after the fourth simulator period by the instructor The
Crewmember may withdraw from the program at any time prior to the FAA Type
Rating check ride. Should he fail that check ride, he will be considered to
have failed an upgrade. If the Type Rating is successfully completed, the
Crewmember may not fly as a Captain unless he holds a permanent bid as
such. should he be awarded or assigned a temporary Captain's position, all
Crewmembers senior to him will be offered a Type Rating. The Company is not
required to award or assign a Crewmember to a temporary Captain's position
if he is type rated pursuant to this section. On a one for one basis senior
Crewmembers accepting such training will be paid Captain's pay. Those so
paid will receive type training within six (6) months of the junior
Crewmember being upgraded to Captain. All other Crewmembers senior to the
junior Crewmember accepting training will be given Type Training within
twelve (12) months of the junior Crewmembers being upgraded.

(f) Rechecks. Whenever a Crewmember fails a simulator or aircraft
---------
check ride, oral or written examination, he shall be given additional
training. Prior to such training, the Company shall consult with the
Crewmember and a representative of the Professional Standards Committee
from the same Category (Captain or Flight Engineer) as to the nature and
amount of training desirable. Any subsequent simulator or flight training
period may be considered the recheck at the discretion of the check
Crewmember.

g) Prior Failures. When a Crewmember successfully completes an
---------------
upgrading program to a higher Crew Class, prior failures shall no longer
be counted against him in subsequent upgrading training. Once a
Crewmember successfully completes transition training from one Type to
another Type in the same Crew Class, prior failures shall no longer be
counted against him when transitioning to another Type in the same Crew
Class.

(h) Grievance Rights. Nothing in this Article shall deny the
-----------------
Crewmember his rights of grievance as set forth in Article XXII,
"Grievances."

(i) Professional Standards Committee Observer. A Professional
------------------------------------------
Standards Committee member may ride as an observer on any simulator or
aircraft training flight at no expense to the Company.

27
<PAGE>

(j) Manuals and Facilities. The Company shall provide the
-----------------------
necessary manuals, school and training facilities to meet the requirements
of this Article.

(k) Equal Training. All Crewmembers will receive equal and like
---------------
training regarding oral or written examinations except during initial
training for new hires or during type qualification as may be required by
the FAA.

(l) Crewmember Hold. A Crewmember assigned pursuant to Section
----------------
B.4. of this Article, after failing to complete training, shall be
ineligible to bid on any vacancy requiring training until such Crewmember
shall have completed an additional 600 hours or six (6) months of active
flying, whichever first occurs, on the Type to which he is assigned unless
released by the Company from this restriction at an earlier time.

Section D. Probationary Crewmembers. Training and upgrading of
-------------------------------------
probationary Crewmembers will be handled at the Company's discretion.

Section E. Prior Qualification. Whenever a Crewmember through any of the
--------------------------------
procedures described in Article XII, changes Type, and he has previously
qualified with World Airways in the Type of equipment and Crew Class to which he
is changing, he will be afforded the opportunity to attend recurrent ground
school plus four (4) hours of flight simulator training at his respective
position prior to being assigned to flight status in that Type if a period in
excess of ninety (90) days has passed since he last flew in that Crew Class and
Type.

ARTICLE XIV
-----------

Scheduling
----------
Section A. General.
---------- --------

1. The Union shall appoint a Scheduling Committee composed of Crewmembers
at each Company Base. The Company shall consult with the Committee and consider
all recommendations concerning any scheduling problems.

2. The Scheduling Department shall keep a scheduling manual and furnish a
copy to the Union. Such manual shall contain all letter of agreement pertaining
to scheduling and such other material as may be agreed to by the parties.

3. Crewmembers will bid a Line of Flying or Open Flying containing a 144
Consecutive Hour Off Period. Nothing herein shall prevent the Company and the
Executive Council from agreeing to test alternative scheduling systems or
methods. Once tested such system or method must be agreed to by the parties and
approved by the affected Crewmembers before implementation and inclusion in the
scheduling manual.

(a) A Line of Flying means a certain and fixed pattern of trips
which can be conveniently patterned together.

(b) Open Flying means any flights that do not fit into a pattern
for a Line of Flying, flights that are uncertain of nature or flights
that become known late in the planning are covered by Open Flying.

(c) Lines of Flying will be constructed by Base and Type. Subject
to the requirement of maintaining economy of operations, such lines will
contain pay hours and days off as equal as is practicable.

(d) Subject to the requirement of maintaining economy of
operations, each Line may have varied destinations without concentration on
any particular destination(s).

(e) If Crewmembers at a Base desire to commute, commuting bid lines
will be constructed where feasible.

4. A Crew Alignment List shall be maintained with Crewmembers listed in
seniority order by Type, Crew Class, and Base. The Crewmember must be Crew
Class and Type qualified to fill the position at the Base for which he is
bidding.

5. Awards will be based on seniority (Crew Class, Type, and Base) and
eligibility as set forth in the FAR's and the applicable provisions of this
Agreement.

6. Scheduling calculations shall be based on Zulu time. of Article XV,
Hours of Service.

7. Scheduling in this Article shall meet the requirements

8. Bids will be submitted as follows: Lines of Flying on forms provided by
the Company. 144 Hour Off Bids on forms provided by the Company.

9. Crewmember bids will be considered in seniority order by Base, Type,
and Crew Class in the following order:

(a) Line of Flying Bid;
(b) 144 Consecutive Hours Off Bid (Open Flying);
(c) No preference or no bid submitted (Open Flying).

10. A Crewmember may bid a Line of Flying during a month in which he also
takes a vacation, provided the Line incorporates the pro-rata days off as set
forth in Article XV, Section E. A Crewmember bidding a Line of Flying during a
month in which he also takes a leave of absence will not be paid for pro rata
days at home not received as a result thereof, since

28
<PAGE>

bidding the line constitutes consent. Bid Lines will not be awarded to
Crewmembers on vacation where the resulting pay hours would exceed guarantee and
the average bid line pay hours is less than guarantee, unless the Union
consents.

11. If a Crewmember loses time from his Line of Flying due to non-
scheduled changes such as sickness, cancellations due to weather, or mechanical
or similar problems or delays not controllable by the Company, irregular
operations, flight time limitations, or personal emergencies, the Crewmember
will be returned to his original schedule as soon as possible. When flight time
is lost due to any of the above, the Crewmember may be assigned to make up lost
time by assigning the Crewmember o an Open Flight(s), if such flight(s) is
available. Such flight(s) will be assigned in the following order:
(a) A Crewmember who needs time to make up his guarantee, including any
line of flying that is below guarantee;

(b) A Crewmember who has lost time due to non-scheduled changes;

(d) Line of Flying holders desiring extra flying. Crewmembers will not
be required to make up lost bid line time during their bid line scheduled
144 Consecutive Hour Off.

12. Management Crewmembers may perform the same flying as other
Crewmembers covered by this Agreement, subject to Article XXX. When a Line of
Flying pattern holder loses time due to management flying, he shall suffer no
loss in total monthly compensation.

13. A Union representative may be present when Lines of Flying and the
144 Consecutive Hour off awards are made.

14. Crewmembers may be scheduled for recurrent ground and simulator
training in one month or two consecutive months. The Director of Cockpit Crew
Training will advise each Crewmember of his projected recurrent ground school
and simulator training schedule with the posting of the bid package for that
month. If the Crewmember desires that his training be re-scheduled in a
different manner, he may contact the Director to request change in the projected
schedule. The Crewmember must then bid to accommodate the agreed training
dates. Bidding a line indicates consent and should the Crewmember not receive
twelve (12) twenty-four (24) hour periods off at Base during a training month,
he will not be paid for such days not at Base.

15. A Crewmember awarded a Line of Flying will remain with such pattern
for the bid period. The Company may release a Crewmember from his bid at the
Crewmember's request.

16. Trip trading is permitted in accordance with guidelines set forth in
the Scheduling Manual.

Section B. Lines of Flying.
----------------------------

1. Lines of Flying shall be posted at the appropriate Base and mailed as
soon as feasible but no later than the 12th of each month based upon the line
flying known at that time for the following month. Such Lines of Flying shall
be planned as nearly equal in pay hours as is economically feasible based upon
the available flight hours for that bid period.

2. Lines of flying bid periods will close by midnight local time Herndon
on the 23rd of each month and be posted immediately thereafter unless mutually
agreed otherwise.

3. A Crewmember who does not bid shall be considered as a "no preference"
bidder and will be assigned as necessary, to support the overall Company
requirement. (See Section C. Open Flying.)

4. Lines of Flying shall be one (1) month in length. If mutually agreed
between the Company and the Union, two (2) month Lines of Flying may be
established. The lines will revert to one (1) month upon the request of either
party.

5. Each Line of Flying shall contain a 144 Consecutive Hour Off period
unless otherwise agreed to by the Union. Should the 144 Consecutive Hour Off
period be encroached upon due to maintenance delays, weather, etc. (as
contrasted to scheduling actions) sanctions that pertain elsewhere to the 144
Consecutive Hour Off period will not apply.

6. Crewmembers may bid both Lines of Flying and Open Flying (144
Consecutive Hours Off). Should a Crewmember bidding both be awarded a Line of
Flying, the Open Flying bid will be automatically withdrawn. If the Crewmember
is not awarded a Line of Flying, he will be awarded a Consecutive Day Off bid
(if he bids) and is awarded Open Flying.

7. Any Lines of Flying not filled by bidders will be dropped to Open
Flying and may be assigned as per Section C, Paragraph 10. Crewmembers not
awarded Lines of Flying will be assigned to Open Flying. Where a type of bid
line is not commonly bid, and the Union requests, the Company will revise the
bid lines for the following month to encourage bidders to the extent that it is
economically feasible.

8. The Company may utilize up to 10% of the bid lines for checking/training
provided such lines are so blocked on the bid sheet. If a concentrated program
dictates additional requirements, the additional requirements will be
coordinated with the Union. Nothing herein shall preclude or limit the Company
from having a Check Airman, who holds a Line of Flying, conduct
checking/training on his bid line. First Officers will be allowed to bid such
training lines.

9. When mutually agreed the bid lines may omit the last day of the month.

10. A Crewmember awarded a bid line may be utilized on his days off as
set forth in Section A, Paragraph 11 of this Article if his bid line loses time
or contains less than sixty-five (65) pay hours.

29
<PAGE>

11. Lines of Flying will be constructed to meet the needs of the service.
This may be mutually modified by the Company and the Union to accommodate
periodic changes in flying requirements. Long range crew manning requirements
will normally be based on a 75 pay hour target for planning purposes.

12. All lines will contain a minimum of twelve (12) twenty-four (24) hour
periods off, (block to block).

13. A Crewmember need not be available until his scheduled show time, but
will advise Crew Scheduling where he may be contacted during the twelve (12)
hours prior to scheduled departure if he is not at his listed contact number. A
Commuting Crewmember will advise Crew Scheduling where he may be reached during
the eight (8) hours prior to his scheduled flight departure, if he is not at his
listed contact number at his Base.

14. The Company will consult with the Scheduling Committee when
constructing Lines of Flying.

15. Where military leave or drill duty conflict with the Line of Flying
that a Crewmember can hold, he will be assigned a 144 Consecutive Hour Off
period that will coincide with his military leave or drill duties. It is
understood that the Crewmember will, where possible, arrange his military duties
so as not to conflict with his Seniority bidding rights.

16. A Crewmember assigned a special project by the Company, or one member
of each Crew Class on the Negotiating Committee, may bid and be awarded a Line
of Flying if his seniority permits. If the line holder is required to drop
trips as a result of these duties (meetings with the Company, in the case of
Negotiation Committee members), he may be assigned makeup trips on other than
his 144 consecutive hours off. He will be paid for the awarded bid line or the
bid line portion flown plus the make-up time, whichever is higher.

Section C. Open Flying. Open Flying is that flying described in Section A.3 of
------------------------
this Article. A Crewmember who does not bid or is not awarded a Line may bid a
144 Consecutive Hour Off period should he desire. Should a Crewmember bid a 144
Consecutive Hour Off period in addition to a Line of Flying, he will be awarded
a Line of Flying if his seniority permits and, if not, a 144 Consecutive Hour
Off period. Lines of Flying will be awarded by Base and the 144 consecutive
hours off awarded system-wide. Should a Crewmember not bid at all, he will be
assigned a 144 Consecutive Hour Off period as set forth below.

1. Bids will close the 23rd of each month and be awarded within three (3)
working days thereafter.

2. Crewmembers not submitting a 144 Consecutive Hour Off bid will be
assigned a specific 144 Consecutive Hour Off period, after the bidders have been
accommodated, in accordance with the gaps remaining in the month and the
Company's crew requirements for that month without regard to seniority.

3. Bid awards and assignments shall be posted on the Base bulletin board
and telexed to the line once completed no less than four (4) days prior to the
beginning of each month.

4. The Company shall return a bidder to his Base prior to the first day
of his 144 Consecutive Hour Off period.

5. In returning a non-bidder, the Company will be allowed a five (5) day
latitude either side of the assigned period, e.g., assigned period 17th through
22nd, the Crewmember's 144 Consecutive Hour Off period may commence any time
from block-in on the 13th to block-in on the 22nd. If a non-bidding Crewmember
is returned prior to such period, his 144 Consecutive Hour Off period will not
commence until within the specified period. If he returns after the 22nd, in
the above example, this clause is violated.

6. A bidding Crewmember's 144 Consecutive Hour Off Period will commence at
0800 ZULU time on the awarded day and run for 144 consecutive hours thereafter.
Should a Base be established outside of the continental limits of the United
States, the commencement time will be established to not conflict with local
arrival and departure times.

7. A 144 Consecutive Hour Off period contained in a Line of Flying will
not be subject to the provisions set forth in this section.

8. Open Flying will be flown on a System-wide basis. The 144 Consecutive
Hour Off period that may be bid in conjunction with Open Flying will be awarded
System-wide as well.

9. Open Flyers, when flying at their awarded Base, will be assigned
flights that lend to a minimum of commuting whenever practicable.

10. After the 144 Consecutive Hours Off bids are awarded, Scheduling may
alert a Crewmember on Open Flying that his assigned trips coincide with those of
a Line of Flying dropped to Open Flying.

Section D. Scheduling Changes.
-------------------------------

The Scheduling Department may make changes in any patterns of flying
awarded Crewmembers when economic and utilization factors so dictate. This
should be done, however, only when there is an overriding reason for doing so.
When this occurs, Crew Scheduling will immediately notify the Crewmember(s)
affected and state the cause therefore. When major changes occur that
necessitate cancellation of a Crewmember's flight(s) or bid pattern(s), Crew
Scheduling shall change only those bid patterns affected. Additionally, Crew
Scheduling shall attempt to reschedule the flying in a Crewmember's bid pattern
with a flight or series of flights that would produce a similar amount of flight
time and time at Home Base.

Section E. Scheduling Practices.
---------------------------------

The Company will schedule its flights in accordance with its past
experience over the routes. Historical records are available

30
<PAGE>

for inspection by the Executive Council or its duly authorized representative.
In planning schedules to comply with Duty Time Limitations the Company will be
bound by the following minimum ground times:

(a) Showtime - As scheduled, but not less than one (1) hour

prior to scheduled departure.

(b) Enroute Stops - As scheduled, but not less than one (1)
hour.

(c) Customs Clearance - As scheduled, but not less than Two (2)
hours (Passenger flights one and One-Half (1 1/2) hours (cargo) and one
(1) hour ferry flights.

Section F. Additional Flying on Bidlines of 65 or More Hours. A crewmember
-------------------------------------------------------------
awarded a bidline which results in pay of 65 or more hours, and who loses time
from that line due to cancellation(s) or delay(s) for any reason, may decline
any additional flight assignment once he has accumulated 65 or more hours of pay
without being subject to disciplinary action. Except, that the crewmember may
be required to accept the return portion of a scheduled trip provided that the
return trip is scheduled within a reasonable amount of time.

Section G. Purpose of Scheduling Effort. The parties agree to cooperate in
----------------------------------------
scheduling activities in an effort to:

1) Improve scheduling efficiency;
2) Improve crewmember quality of life; and
3) To improve crewmember and Scheduling personnel morale.

To this end, meetings will be held periodically between the parties and it is
agreed that continuing effort will be made to resolve scheduling issues. The
intent of the meetings is to further investigate cooperative efforts deemed to
be of benefit to the parties.

ARTICLE XV

Hours of Service
----------------

Section A. Duty Time Limitations.
----------------------------------

1. Flight and Duty Time Limits.
---------------------------
Non-Extended Range Aircraft.
---------------------------

Up to 12 flt hrs with 1 Capt, 1 F/O and 1 F/E; limit to 16 hours duty time.

12+ flt hrs on a ferry flight with 1 Capt, 1 F/O and 1 F/E; limit to 16
hours duty time.

Extended Range Aircraft:
-----------------------

Up to 8 flt hrs with 1 Capt and F/O; limit to 16 hours duty time with
unlimited legs.

Up to 12 flt hrs with 1 Capt and 2 F/O's; limit to 16 hours duty time with
unlimited legs.

Over 12 flt hrs with 1 Capt and 3 F/O's; limit to 16 hours duty time with
unlimited legs.

Over 12 flt hrs with 2 Capt's and 2 F/O's; limit to 18 hours duty time with
max 4 legs.

Over 12 flt hrs with 2 Capt's and 2 F/O's; limit to 20 hours duty time with
max 3 legs.

The Company shall be reasonable in scheduling each duty time and base such
schedule on past practice, historical data and operating experience.

The Company and the Union agree that the extended range aircraft duty time
limits apply to aircraft with crew rest modules substantially similar to the
current MD11 passenger aircraft. The Company and the Union must mutually agree
on the crew rest module for other aircraft using the substantially similar test
in order for the rules to apply to them.

2. Commercialing and dead-heading on passenger flights shall not be
scheduled for over 18 hours without the consent of the Union. When the Union
agrees to waive such commercialing and dead-heading limits, the Crewmember(s)
will receive a minimum of 18 hours of crew rest upon arrival at the destination.

Section B. Duty Time Determinations. Duty time is determined as follows:
---------- -------------------------

1. Duty time shall commence when a Crewmember is required to report for
duty at an airport or actually reports at the airport, whichever is later,
except as provided in Paragraph 2.

2. At a Crewmember's home Base duty time shall commence at the required
sign in time at the base Dispatch Office or the time that the Crewmember
actually signs in if it is later.

3. Duty time shall end thirty (30) minutes after the flight arrives at
the blocks at the point where the flight terminates, except as provided in
paragraph 5.

4. When a Crewmember deadheads, duty time shall commence one (1) hour
prior to scheduled departure time for domestic and two (2) hours prior for
international trips or connections.

5. At an enroute stop, duty time shall start and end at the hotel if the
hotel is more than forty (40) statute driving miles from an airport of arrival
or departure.

6. (a) A Crewmember's duty time will be broken at any time the
Crewmember is released from duty for a rest period.

(b) For international flying the minimum enroute rest period will be
fourteen (14) hours block to block with ten (10) hours uninterrupted rest at
place of lodging, with the exception that the rest period will be twelve (12)
hours block to block with eight (8) hours uninterrupted rest at place of lodging
if the next flight is all deadhead or if the Crewmember is flying on a cargo
operation or a ferry flight.

31
<PAGE>

(c) For domestic flying the rest period will be as specified in F.A.R.
121 with a minimum of six (6) hours uninterrupted rest at the place of lodging
except that the Crewmember will have a minimum rest period of twelve (12) hours
block to block with eight (8) hours uninterrupted rest at the place of lodging
if the Crewmember's duty time immediately preceding such rest is scheduled for
twelve (12) hours or more.

(d) On domestic flying any leg of a flight or series of legs of a
flight, that continues as international flying, the rest period before
commencing the international leg shall be as specified for international flying.

(e) A Crewmember may be alerted no sooner than one (1) hour prior to
Company pick-up time.
7. During duty time a Crewmember is under the control and direction of
the Company.

8. At his option, and with approval of Crew Scheduling, a Crewmember when
released from flight duty may waive his maximum allowable duty time limit, if
his next assignment is to deadhead to his home Base, as a "tail end" deadhead
flight. The Crewmember does not waive over duty compensation as provided for in
this Agreement.

Section C. Excess Duty Time.
-----------------------------

Overduty for non-extended range aircraft to start at 16 hours. Overduty
for extended range aircraft to start at 16 hours with the exception of flights
over 12 hours with 2 Capt's and 2 F/O's scheduled for 20 duty hours and maximum
3 legs which commences at 17 hours.

Section D. Flight and Duty Time Limitations Domestic and international
--------------------------------------------
flights and duty time limitations, except as otherwise specified in this
Agreement, will be in accordance with the F.A.R.'s.

Section E. Time at Home Free From Duty.
----------------------------------------

1. (a) No Crewmember will be required to keep the Company advised of his
whereabouts on his one hundred forty-four (144) consecutive hours off. An open
flyer, during all other days off, shall notify Scheduling when he will be absent
from his residence for more than an eight (8) hour period A Crewmember will be
available at his listed phone number twelve (12) hours prior to his scheduled
departure time or will advise Crew Scheduling where he may be reached. When a
Crewmember returns to his Base from a flight or a series of flights or from
training, he may be advised by Crew Scheduling of his next projected flight and
the date of such flight.

(b) Minimum crew rest upon termination of a trip or training at home Base
will be twenty-four (24) hours block to block unless the Crewmember consents to
a lesser time. This may be modified by Paragraph (c) below. bidding a line
constitutes consent.

(c) A Crewmember may be scheduled through his Base on a Line of Flying. A
Crewmember on Open Flying will be given a minimum of twenty-four (24) hours off
Block to Block at his home Base upon termination of trip or training unless he
consents otherwise. Prescheduled transits for less than four (4) hours are an
exception to this rule. In the case of a Commuting Crewmember, he may be
scheduled through his Base without the above restrictions. Nonscheduled
transits of the Base shall not exceed four (4) hours Block to Block.

2. (a) Crewmembers shall receive not less than twelve (12) twenty-four
(24) hour periods at their home Base free from all duty with the Company during
each month. One period shall consist of 144 Consecutive Hours Off (block to
block). A twenty-four (24) hour Block to Block period is deemed one (1) duty
free period.

(b) In no case shall such periods be awarded or assigned retroactively. A
Crewmember cannot be assigned any duties during his one hundred forty-four (144)
hours off except if contact is established during this period the Crewmember
will accept an alert for a revised duty schedule subsequent to the one hundred
forty-four (144) hour period. If required, the Company may utilize the
Crewmember during the balance of his twelve (12) guaranteed days off a month.
In the event the Crewmember is utilized during this period, he shall be paid
one-eighteenth (1/18th) of his guarantee for that month for each day not
received. In addition, the Crewmember will be entitled at his option to an
additional day added to his next vacation for each such twenty-four (24) hour
duty free period he did not receive. Any such days added to the vacation will
not be compensated for by the Company.

(c) The twelve (12) days off per month will be reduced pro rata by any
leave of absence days, vacation days, sick leave days, days of emergency leave
or days of jury duty. If these pro rata days total four (4) or more in any
month the Company will be relieved from the obligation of providing the
scheduled one hundred forty-four (144) hour period.

(d) When a Crewmember is assigned to training for more than eighteen (18)
calendar days in a calendar month, the provisions of Article XV, Section E,
Hours of Service, shall not apply. When a crewmember is assigned to training
for five (5) or more but less than eighteen (18) calendar days in a calendar
month, the guaranteed days off provided in Article XV will be prorated.

32
<PAGE>

<TABLE>
<CAPTION>
DAYS OFF FORMULA
30-Day Month
(To include Jan. Feb. and March except during leap year)
Days Pro Days Pro
Worked Rata Worked Rata
-------- ---------------------- ---------------- --------------
<S> <C> <C> <C>

1 0 16 6
2 1 17 7
3 1 18 7
4 2 19 8
5 2 20 8
6 2 21 8
7 3 22 9
8 3 23 9
9 4 24 10
10 4 25 10
11 4 26 10
12 5 27 11
13 5 28 11
14 6 29 12
15 6 30 12
DAYS OFF FORMULA
31-Day Month
(To include February during leap year)

Days Pro Days Pro
Worked Rata Worked Rata
-------- ---------------------- ---------------- --------------
1 0 16 6
2 1 17 7
3 1 18 7
4 2 19 8
5 2 20 8
6 2 21 8
7 3 22 9
8 3 23 9
9 3 24 10
10 4 25 10
11 4 26 10
12 5 27 11
13 5 28 11
14 5 29 11
15 6 30 12
31 12
</TABLE>

Section F. Delayed Flight Time and Excessive Ground Time.
----------------------------------------------------------

When a flight is delayed and the length if the delay plus the scheduled
duty time of the flight exceeds maximum duty time under the contract by two
hours, adequate hotel facilities will be provided for the crew, if available,
for a minimum of six (6) hours. The Company may provide such hotel rest at an
earlier point in the delay.

Section G. Flight Time/Time Away from Home Ratio.
--------------------------------------------------

1. For the purpose of this Section "trip hours" means all the time a
Crewmember spends away from his bid or assigned Base as calculated for per diem
hours as set forth in Article IV, Section A and shall not include any training
assignments other than line training.

2. For "trip hours" flown a Crewmember shall receive a minimum monthly
flight pay of one (1) hour for each five (5.0) trip hours away from his bid or
assigned Base, prorated to the nearest one-hundredth (1/100th) of an hour.

3. At the end of each month a Crewmember will be paid the greater amount
of the following:

(a) Actual hourly flight pay;

(b) Trip hour pay;

Applying the ratio 1 for five (5.0) to a twenty-four (24) hour period equals 4.8
hours per day.

ARTICLE XVI

Physical Examination
--------------------
Section A. Each Crewmember must maintain the medical certificate
----------
required by the FAA for his Crew Class. Examinations are to be conducted by an
FAA designated medical examiner.

Section B. Physical standards will be no more restrictive than those
----------
standards set forth in the F.A.R.'s as being required to maintain the FAA
medical certificate required for the Crewmember's Crew Class.

Section C. Any Crewmember who fails to pass an examination by the Company
----------
designated FAA medical examiner may, at his option, have a review of his case in
the following manner:

1. He may consult a medical examiner of his choice to conduct the same
medical examination as the Company examiner performed at his own expense.

2. A copy of the report and findings of the medical examination conducted
by the physicians of the Crewmember's choice shall be furnished to the Company.
In the event such findings verify the findings of the Company's medical
examiner, no further medical review of the case shall be afforded.

3. In the event the medical findings disagree, the two medical examiners
involved will agree upon and appoint a third qualified and disinterested medical
examiner, preferably a specialist, for the purpose of making a final
determination of the Crewmember's condition.

4. The expense of employing the third medical examiner, referred to
above, shall be borne one-half by the Company and one-half by the Crewmember.
Copies of such medical examiner's report and findings shall be furnished to the
Company and Crewmember involved.

5. No Crewmember will be denied his right of reconsideration under F.A.R.
67.27 and the Company will accept the ultimate determination of that Agency.

Section D. General. Any information obtained by or as a result of a
--------------------
Company physical examination shall be kept confidential between the doctor(s),
the Crewmember, and the administrative personnel of the Company concerned with
the Crewmember's physical condition.

33
<PAGE>

Section E.
----------

The Company will advise a crewmember immediately of any adverse information
pertaining to him/her. If requested by the Crewmember, this information will be
put in writing for the Crewmember. If the Crewmember requests, the Union will
be advised of the action. This will be done, if possible, prior to such
information being furnished to the FAA or any other regulatory agency provided
such action complies with all governing federal and state regulations.

ARTICLE XVII

Uniforms
--------

Section A. Crewmembers shall provide and wear standard uniforms as
----------
prescribed by the Company at all times while on duty. The expense of the
uniform including maintenance shall be borne by the Crewmember.

Section B. The Union shall designate a Uniform Committee composed of
----------
Crewmembers which shall be consulted by the Company regarding any contemplated
change in the Crewmember's uniform and the Company shall give every
consideration to the recommendation of this committee.

Section C. The Company and the Union Committee shall agree on a tailor or
----------
tailors by whom the uniforms shall be made.

Section D. In the event the Company requires uniform crew luggage, the
----------
Company shall provide such luggage to the Crewmember at cost.

Section E. When the Company changes the uniform and requires Crewmembers
----------
to purchase new uniforms, a pro rata share of the cost of the Crewmember's
current uniform will be paid by the Company based on a useful life of the
uniform of two years from date of purchase.

Section F. When a Crewmember is required to purchase any uniform item
----------
damaged in the line of duty, a pro rata share of the cost of such replacement
will be paid by the Company, based on a useful life of two years.

ARTICLE XVIII

Union Security
--------------

Section A. It shall be a condition of employment that all Crewmembers of
----------
the Company covered by this Agreement who are members of the Union in good
standing on the effective date of this Agreement shall remain members in good
standing, and those who are not members on the effective date of this Agreement,
shall, on or before the ninetieth (90th) day following the effective date of
this Agreement, become and remain members in good standing in the Union or, in
the alternative, tender to the Union a monthly sum equivalent to the standard
monthly dues required of the Union members, such sums to be recognized as
"Service Fee". It shall be a condition of employment that all Crewmembers of
the Company covered by this Agreement and hired on or after its effective date
shall, on or before the ninetieth (90th) day following the beginning of such
employment, become and remain members in good standing in the Union, or in the
alternative, tender to the Union monthly dues required of the Union members,
such sums to be recognized as "Service Fees". Should the new Crewmembers elect
not to become a member of the Union but only to pay the Service Fee, he will
also be required to pay an Initial Service Fee which shall be the equivalent of
the standard initiation fee.

Section B. The Company will deduct from the wages of any employee covered
----------
by this Agreement, said employee's dues, as a member of the Union upon receiving
the employee's voluntary and individual written authorization for the Company to
make such deductions. The Company will deduct said employee's dues in the month
in which the employee is recalled from furlough or returns from a leave of
absence. In the event the employee is recalled from a furlough or returns from
a leave of absence after the dues have been deducted for the month, the Company
will make a double deduction the following month. The Company will pay over to
the proper officers of the Union the wages withheld for such initiation fees and
dues. The amount withheld shall be reported and paid to the Union prior to the
end of the month in which the deductions were made, accompanied by the following
information including names, addresses, and social security numbers of
employees: New Hires including hire dates; terminations including termination
dates; furloughs including furlough dates; recalls

34
<PAGE>

including recall dates; leave of absences including leave dates; return from
leave of absences including return dates.

Section C. Crewmembers who are members of the Union shall pay membership
----------
dues as set forth herein except that payment for membership dues shall not be
required as a condition of employment during leaves of absence without pay in
excess of thirty (30) days, or during periods of permanent transfer to a
classification not covered by this Agreement.

Section D. The Union agrees that it shall indemnify the Company and save
----------
the Company harmless from any and all claims which may be made by the Crewmember
or Crewmembers against the Company by virtue of the wrongful application or
misapplication of any of the terms of this Section.

Section E. In the event of termination of employment, there shall be no
----------
obligation upon the Company to collect dues until all other deductions have been
made.

Section F. The Union agrees notice shall be given the Company at least
----------
thirty (30) days before the Company is required to remove a Crewmember from his
employment by reason of his failure to maintain his membership in good standing
in the Union and in accordance with Paragraph A of this Article.

ARTICLE XIX

Union Representation
--------------------

Section A. The Company will provide the Union with a suitable bulletin
----------
board at each Base for the posting of official notices of Union meetings,
elections and other notices pertaining to internal Union matters. All such
notices shall be signed by a duly authorized representative of the Union.

Section B. The Company agrees to admit to its Bases the officially
----------
designated representatives of the Union to transact such business as is
necessary for the administration of this contract.

Section C. The Union shall select Crewmember representatives and shall
----------
notify the Company from time to time of their appointment or removal. The number
of employee representatives shall be limited to those necessary to provide
convenient representation for Crewmembers. The Company shall notify the Union of
the appropriate Company representatives.

Section D. Any Crewmember required to be present at a Company hearing or
----------
investigation involving the Crewmember will be entitled to Union representation
at such hearing or investigation.

ARTICLE XX

Management
----------

Section A. The rights of ownership, the management of the Company and
---------
direction of the working forces, including the right to hire and assign
employees, the right to direct, plan and control operations, and to schedule
flying operations and the right to determine the flying to be performed, and the
right to introduce new and improved methods, equipment or facilities, and to
change existing methods, equipment and facilities, and the right to determine
and change the location of the Company's Bases and facilities, the flying to be
done from each and the location of work within the Bases and facilities, the
number of employees, the right to lease facilities or equipment, and the right
to establish or change Company rules and in general to maintain discipline and
efficiency, are vested exclusively with the Company provided that the rights of
management set forth in this Article shall not be exercised so as to violate any
other provisions of this Agreement.

Section B. All Employees covered by this Agreement will be governed by
---------
Company rules, regulations and orders issued by properly designated supervisors,
provided such rules, regulations and orders are not in conflict with this
Agreement.

Section C. The Company shall have the right to discharge or to otherwise
---------
discipline any employee for just cause. The Company's business requires
adherence to the highest standards of safety and the maintenance of tight
scheduling of flights. In view of these requirements and without limiting the
generality of the foregoing, it is therefore agreed that the limitations against
the use of alcohol set forth below shall be greater than those prescribed by the
Federal Air Regulations. It is therefore agreed that no Crewmember may act as a
Crewmember of a civil aircraft within 14 hours after the consumption of any
alcoholic beverage, which time is six (6) hours greater than that limit imposed
by FAR 91.11 (Liquor and Drugs), or while under the influence of any alcoholic
beverage. Further, no Crewmember shall operate an aircraft when using any kind
of drugs that affects his flying ability. The Company may direct a Crewmember
to submit to a urinalysis (or any other generally accepted medical test) upon a
reasonable suspicion of substance abuse. Disciplinary action may be taken if a
laboratory test proves positive and/or other factors substantiate the

35
<PAGE>

conclusion that a Crewmember has violated this section. Crewmembers may be
subject to disciplinary action for the refusal to submit to a test without
justification. The Company representative directing the test will be at the
level of the Chief Pilot or Chief Flight Engineer or a higher official in the
Flight Operations Department. The Company will pay the costs of such test and
the Crewmember shall execute the appropriate release, if any, so the Company may
obtain a copy. It shall be cause for discharge should any Crewmember violate
these rules or should he fail to show for a flight when scheduled unless such
failure is due to unavoidable circumstances beyond the control of the
Crewmember.

ARTICLE XXI

No Strike - No Lockout
----------------------
Section A. During the term of this Agreement, the Union shall not
---------
authorize, cause, engage in, sanction or assist in any work stoppage, strike or
slowdown of operations.

Section B. During the term of this Agreement, the Company shall not cause,
---------
permit or engage in any lockout of its Crewmembers.

Section C. The Company reserves the right to discharge or otherwise
---------
discipline any Crewmember taking part in any violation of this provision of the
Agreement.

Section D. In addition to Section A of this Article the Union agrees that
---------
the Crewmembers will continue to perform all duties which are necessary to
enable the Company to operate flights for or in support of traffic sponsored by
the Department of Defense of the United States of America, even though such
Crewmembers withdraw from commercial airline service because of a dispute
arising out of negotiations for a new contract after the expiration date of this
Agreement and/or during and after all procedures of the Railway Labor Act have
been exhausted, provided the Company shall submit to the Union, when requested,
proof that a particular flight is being flown or operated under charter to the
Department of Defense.

ARTICLE XXII

Grievance Procedure
-------------------

Section A. A grievance is defined as a claim or dispute by a Crewmember or
---------
the Union concerning the interpretation, application, or alleged violation of
the Agreement.

Section B. A Crewmember who has any complaint that his rights under this
---------
Agreement have been violated should, and is encouraged to, bring the matter to
the attention of his supervisor before filing a Grievance. In a joint effort by
the parties to eliminate circumstances which precipitate grievances, the
following procedure is recommended:

Whenever a crewmember feels that he is being scheduled or treated in a
manner which is in conflict with the Collective Bargaining Agreement, the
crewmember should make every effort to contact his superior

Section C. All Crewmember grievances must be filed and processed in
---------
accordance with the following procedures:

STEP 1: The Crewmember shall reduce his grievance to writing and must
submit it to the Union within thirty (30) days after he has, or reasonably
would have had, knowledge of the matter giving rise to the grievance. The
written grievance shall set forth the statement of facts and the relief
sought and shall state on the grievance form if he has brought the matter
to the attention of his supervisor, naming the supervisor and the date of
such contact. The Union shall submit such grievance to the Director of
Operations who will schedule a meeting with the Union Business
Representative within twenty (20) days of the receipt of the grievance in
an attempt to resolve the grievance. If the grievance is not resolved at
this meeting, the Director of Operations shall within ten (10) days provide
the Union Business Representative with a written statement of his decision.
Should the Company fail to respond in writing within the ten (10) day
period, the case shall automatically proceed to arbitration.

STEP 2: If the Union is not satisfied with the disposition of the
grievance in the Step 1 Proceeding above, it may appeal the case to
arbitration provided it does so within

36
<PAGE>

thirty (30) days of written notification by the Company of the Step 1
action.

Section D. A grievance involving the discipline or discharge of a
---------
Crewmember shall be brought directly to Step 2 and must be filed within ten (10)
days of the date of this discipline or discharge. A Company action of
discipline or discharge involving a Crewmember shall be done by written notice
to the Crewmember which will take effect as of the date of the receipt of such
notification by the Crewmember. Such notification shall include the precise
charge or charges against him which caused the discharge or discipline and shall
set a hearing to take place within five (5) normal business days.

Section E. If a Crewmember is terminated, suspended or has his normal pay
---------
withheld for disciplinary reasons, he shall receive a hearing by the Company
within five (5) business days of his notification of such action. If such
hearing is not scheduled within that time, the Crewmember will be automatically
and immediately returned to his previous status and no loss of pay shall be
invoked.

Section F. If any decision made by the Company under the provisions of
---------
this Article is not appealed by the Crewmember or Crewmembers within the time
limits prescribed herein for such appeal, the decision of the Company shall
become final and binding. Time limits provided in this Article XXII may be
extended by mutual agreement in writing.

Section G. At any Step of the grievance procedure the Company or the Union
---------
may designate a substitute for the official designated herein.

Section H. Any grievance filed under the terms of the prior Agreement
---------
shall be handled pursuant to the Grievance Procedure, Article XXII, and
Arbitration, Article XXIII of that Agreement.

Section I. If the Union or the Company fails to comply with the time
----------
limits set forth in this Article or Article XXIII, then the failing party shall
automatically forfeit and lose its claim. If the parties mutually agree to
extend the time limits, such agreement must be in writing.

ARTICLE XXIII

Arbitration
-----------
Grievances appealed to arbitration shall be processed as follows:

Section A. The parties shall attempt to agree upon an arbitrator, but if
---------
no agreement is reached in fifteen (15) days after appeal either the Union or
Company may thereafter request the Federal Mediation and Conciliation Service to
submit a list of five (5) persons qualified to act as the arbitrator. A
representative of the Company and a representative of the Union shall meet after
receipt of the list and shall alternatively strike two (2) names from the list,
the party to strike first to be determined by the toss of a coin. The fifth
(5th)r remaining name on the list shall thereupon be selected as the arbitrator.

Section B. The arbitration shall be scheduled to commence as soon as
---------
feasible after selection of the arbitrator. The arbitrator shall proceed to
hear the matter and render his decision and award within sixty (60) days after
final submission of the matter to him, which award shall be final and binding
upon the parties. If the arbitrator has not rendered the award within sixty
(60) days after final submission of the matter to him, the parties will jointly
upon request of either party, provide the arbitrator with written notice that
his decision and award must be rendered within thirty (30) days of the date of
such notice. If the decision and award is not rendered within such period of
time, the jurisdiction of the arbitrator shall cease and he shall not be
entitled to an compensation. In such an eventuality, either party may request
that the grievance be submitted to another arbitrator to be selected as provided
in Section A with such arbitration hearing to be conducted de novo.
-- ----

Section C. The power and authority of the Arbitrator shall be strictly
---------
limited to interpreting the explicit terms of this Agreement or determining
whether a violation of this Agreement has occurred. The Arbitrator shall not
have authority to add to or to subtract from or modify any of the terms of this
Agreement.

Section D. All costs and expenses of the arbitration shall be assumed
----------
equally by the parties. However, the fees or salaries and expenses of each
party's representatives shall be borne by the party employing such
representative. Each of the parties hereto will assume the compensation, travel
expense, and other expenses of the witnesses called or summoned by it.
Witnesses who are employees of the Company shall receive, subject to
availability of space, free transportation over the lines of the Company from
the point of duty or assignment to the point at which they must appear as
witnesses and return.

Section E. The above stated time limits set forth in this Article may be
---------
extended in writing by mutual agreement of the Company and the Union.

Section F. In the event a Crewmember chooses to be represented in an
---------
Arbitration proceeding by a representative other than the Union business
representative or another representative designated by the Union, the Crewmember
shall be responsible for the fee, if any, of such representative of his choosing
and for the expenses incurred by such representative, including any expenses or
fees attributable to witnesses that such representative calls upon to testify
and the Union and the Company shall not be liable for such fees and expenses.

Section G. Expedited Arbitration. World Airways, Inc. (the Company) and the
---------------------------------
International Brotherhood of Teamsters (the Union) agree that neither party
intends to willfully violate the

37
<PAGE>

Contract. They further agree that, in the future, significant disputes between
the parties over interpretations of the Collective Bargaining Agreement,
concerning directives issued by the Company to the crewmembers in the
performance of Company operations, that are neither frivolous nor obviously un-
substantiated, shall be resolved through the grievance and arbitration
procedures of said Agreement and as set forth below.

The parties agree that disputes arising out of actions deemed by the
Company to be disruptive to company operations and/or deemed by the Union to be
harmful to the Union's membership shall be expedited through arbitration. In
considering whether to expedite arbitration of an issue, the parties shall
consider whether the passage of time related to hearing the issue through normal
arbitration procedures would preclude an adequate remedy. The agreement to
expedite a dispute to arbitration shall not be unreasonably withheld by either
party. Disagreements as to whether a dispute is appropriate for expedited
arbitration shall be referred to the arbitrator for decision. Arbitration costs
shall be borne equally by the parties.

Issues falling under this section that cannot be resolved by the parties in
direct conference shall be expedited to arbitration within seven (7) working
days, or on the first available date if later than seven (7) working days, to
the arbitrator listed below with the first available open date. The parties
shall make themselves available on said date to present their cases. The
parties may mutually agree to an arbitrator not on the attached arbitrator list.
The arbitration shall be concluded at a single session with the arbitrator
making a decision within five (5) calendar days following the arbitration,
unless agreed otherwise by the parties. The parties agree to use expedited
briefing procedures or, if mutually agreed, to dispense with briefs altogether.
The decision of the arbitrator shall be binding on the parties.

LIST OF ARBITRATORS

1. Richard Block

2. Herbert Fishgold

3. Robert Harris

4. Nick Zumas

5. M. David Vaughn

ARTICLE XXIV

Insurance
---------
Section A. Medical Insurance.
-----------------------------

1. The Company will continue to maintain a group medical program for all
Crewmembers, Such program will include an insurance indemnity plan, which plan
is currently underwritten by Cigna Insurance Co. The Company may change the
plan or the carrier during the term of this Agreement, but no change will
provide any lesser benefits. The Company will pay the cost of employee
coverage. If the Crewmember elects dependent coverage, he shall pay $35.00 per
month for such coverage with the Company to pay the balance of the cost of such
coverage.

2. The Company will also offer an alternative plan or plans, e.g., the
Kaiser and Heals plans in effect at the Oakland Base, where feasible, at all
Crewmember Bases. The Company will pay all of the cost of employee and dependent
coverage for such alternative plan or plans. Any alternate plan offered by the
Company will be a full service plan that would reasonably be considered equal in
service capability to the insurance indemnity plan.

3. The Cigna Insurance Plan will be amended in accordance with Traveler's
proposed comprehensive medical plan, a copy of which is attached and is made a
part of this Agreement. This amendment will be effective as soon as feasible
after the execution of this Agreement, as of which date the amended employee
contribution for dependent coverage will be effective.

Comprehensive Medical Insurance based on the Company plans with the
following contribution per month:
<TABLE>
<CAPTION>
Single Crewmember With Dependents
----------------- ---------------
<S> <C> <C>
Flex 300 $ 25 $46.46
PPO -0- $38.75
DPP -0- $28.58
Health Source -0- $33.02
</TABLE>

Section B. Life Insurance
--------------------------

The Company will continue to provide a Life Insurance Plan with an
applicable death benefit based on the Crewmember's period of Active Service as
follows:

Period of Active Service Life Amount
------------------------ -----------
Prior to completion of $50,000
fifth year of Active Service

After completion of fifth $80,000
year of Active Service

The Company will pay the entire cost of the life insurance coverage. However,
the Crewmembers will be responsible for any income tax payments.

Section C Hostile Action
-------------------------

The Company will provide insurance for each Crewmember while assigned to
the MAC operation in the form of a One Hundred Thousand Dollar ($100,000.00)
Accidental Death and Dismemberment Insurance Policy, to cover death or
dismemberment caused by hostile action in a country where a state of war,
whether declared or undeclared, exists. Such insurance will also apply when a
Crewmember flies freight that requires a waiver of FAR 103 or military cargo
which would require such a waiver if it were not military. The Company may self-
insure against this hazard. The Company shall provide the Union with a copy of
the coverage. Such insurance shall be paid in addition to all other policies and
that compensation provided by Article XXV.

Section D Dental Insurance
---------------------------

The Company will continue to provide Crewmembers and their dependents with
a dental care program with the same

38
<PAGE>

benefits as the program in effect at the time of the execution of this
Agreement. The plan will be fully paid for by the Company.

Section E. Retired Crewmembers. Crewmembers retiring pursuant to the World
-------------------------------
Airways Crewmember's Retirement Plan shall be covered under the Company's group
medical plan then in force for active Crewmembers. The dependents of such
Crewmembers will be covered on the same basis as active Crewmembers. This
program is applicable for the Crewmember when he retires at age sixty (60) or
later until he reaches age sixty-five (65). It is also applicable to any
Crewmember who takes the option for early retirement as provided in Article
XXVI, Section B.

Section F. Furloughed Crewmembers. The Company agrees to continue the
----------------------------------
group Medical and Dental Plans for the Crewmembers and dependents while on
furlough on the basis as set forth below:

1. The Company will contribute on behalf of the furloughed Crewmember its
share of medical and dental insurance premiums as agreed to in Section A above
for the entire month the Crewmember is affected by furlough.

2. The Company further agrees to contribute on behalf of the furloughed
Crewmember its share of medical and dental insurance premiums as agreed to in
Section A above for the entire month following the month in which a Crewmember
was affected by furlough.

3. The Crewmember shall have the option to continue the medical and dental
insurance for him and his dependents for the following six (6) months by
notifying the Manager of Employee Benefits of their option and making full
payment for the premium of the medical and dental insurance policy by the fifth
(5th) of the month the insurance is to be effective.

4. When a Crewmember is recalled from furlough in mid-month while he is
contributing the entire amount o his medical and dental insurance, the Company
agrees to pay the entire amount of the Crewmember's insurance for that month.

5. If a Crewmember refuses recall from furlough, this benefit will cease
on the last day o(Pounds) the month in which recall was refused.

Section G. Loss of License Plan. The Company will continue to provide its
--------------------------------
loss of license plan as in effect prior to the execution of this Agreement,
except that, as of the first day of the month following the effective date of
the agreement, the plan will be amended in the following respects:

1. Monthly benefit increased to $2,200.

2. Waiting period increased to nine (9) months.

3. Flight Engineers subject to the Prior Rights clause will be paid the
monthly benefit for the five (5) year period or age sixty-two (62), whichever
first occurs, provided that the monthly benefit will be reduced at age sixty
(60) to $800.00 per month.

Section H. Medical Leave. The Company will continue to pay for the
-------------------------
employee's insurance and contribute to dependent insurance for the first two (2)
years the Crewmember is on unpaid medical leave. The employee may self-pay for
an additional year at the Company's group rate.

ARTICLE XXV

Internment, Prisoner or Hostage
-------------------------------

Section A. Any Crewmember who, while in the course of his duties for the
---------
Company is interned, captured, held as a prisoner, or hostage of war, by a
foreign government or insurgents, or is missing as a result of an unfriendly
action by a foreign government or insurgents, shall be allowed compensation
equal to his guarantee and insurance benefits until released from internment or
hostage. Such compensation and insurance benefits shall continue until such
time as he is released or until proof of death is established in fact or there
is reasonable presumption of death up to a maximum of thirty-six (36) monthly
payments. Such compensation will be paid to the beneficiary or beneficiaries
designated in writing by the Crewmember prior to his departure from the United
States. It will be the Crewmember's responsibility to complete the form and
file the same with the Flight Operations Department.

Section B. The Company shall establish a form in compliance with the
---------
requirements of this benefit to be used by he Crewmembers in designating
assignment of the benefit contained herein.

Section C. When the Crewmember returns to duty, he will be entitled to
---------
exercise his full seniority rights.

39
<PAGE>

ARTICLE XXVI

Retirement Plans
----------------

Section A. Retirement Income Plan. The World Airways, Inc. Crewmembers
----------------------------------
Retirement Income Plan in effect as of the date of execution of this Agreement
will remain in effect for the period of this Agreement. The current target
benefit is 1.80%. During the years 1994-1998, a contribution of $56,813.00
additional sum will be contributed each year for a total sum over the period of
$227,252.00. During the Plan valuation following the 1994 year, the dollar
amount of the 1.80% and the $56,813.00 contributions will be combined and a new
target benefit rate greater than 1.80% shall be calculated. That new target
benefit rate shall become effective on 6-30-98 (the last date of the Agreement).
Contributions to the Crewmembers Deferred Income Plan will be included in
calculating the target benefit. Company contributions applicable to each Plan
Year shall be made no later than September 15 following each Plan Year. The
Company and the Union may amend this Plan.

Section B. As of the effective date of this Agreement, the Plan will
---------
incorporate an option, subject to Internal Revenue Service approval, for early
retirement for any crewmember who has attained the age of fifty-five (55) and
who is terminated from employment due to a failure to complete training as set
forth in Article XIV, Training and Upgrading. The amount of such crewmember's
retirement benefit will be equal to his accrued retirement benefit at the time
of his termination, actuarially reduced from age sixty (60) to his termination
date.

Section C. Deferred Income Plan. The Crewmembers Deferred Income Plan as
--------------------------------
in effect as of the date of execution of this Agreement will remain in effect
for the period of this Agreement, subject to IRS qualification. The Company and
the Union may amend this Plan. The maximum crewmember contribution to the 401K
Plan is 15%.

Section D. Retirement. Each Crewmember is required to retire from the
----------------------
service of the Company as of his seventieth (70th) birthday, or such earlier
time as required by applicable federal law.

ARTICLE XXVII

Severance Pay
-------------

Section A. When Crewmembers are severed from employment as a result of the
---------
introduction of automated equipment or changes in present FAA licensing
requirements, the Company shall pay such Crewmembers severance allowance as
provided in this Article.

Section B. One month's severance allowance shall be equal to the
---------
Crewmember's guarantee, including longevity pay, computed to the nearest month
in which he is severed.

Section C. Severance pay shall be paid in accordance with the following
---------
schedule:

Five years' service or more - 1 years' guarantee
Four years' service - 9 months' guarantee
Three years' service - 6 months' guarantee
Two years' service - 3 months' guarantee
One year's service - 1 month's guarantee

Section D. At a Crewmember's option, he may accept other employment if
---------
such other employment is offered by the Company. In no event shall such
employment be contingent on reduction of or in lieu of severance pay.

Section E. The Crewmembers shall be notified by the Company of severance
---------
in writing by certified or registered letter, return receipt requested, or by
telegram not less than thirty (30) days prior to the effective severance date.

Section F. A Crewmember may choose to take his severance pay in one lump
---------
sum, or as specified by the Crewmember. In no case shall payment be extended
beyond twenty-four (24) months after the effective date of severance.

Section G. If the Company and a Crewmember jointly agree, a Crewmember may
---------
accept severance out of seniority.

Section H. Effective on the date the company furloughs Flight Engineers in
---------
association with the removal of DC-10 aircraft from service, it shall offer
severance in inverse order of seniority to seven (7) Flight Engineers per
aircraft removed until seven (7) Flight Engineers have accepted severance or
until all Flight Engineers on furlough or leave have been so offered.

Beginning with the date of the first offer of severance described above,
any Flight Engineer furloughed or on leave who remains on the seniority roster
for a period of nine (9) months without recall shall be offered severance.

Within 30 days of the time the Company has no remaining Flight Engineer
configured aircraft in service, it shall offer severance to all Flight Engineers
remaining on the seniority roster.

Any Flight Engineer severed under the above provision shall receive
preferential hiring consideration over other applicants for any World Airways,
Inc. position for which he applies if all other hiring criteria are equal.

Flight Engineers are considered to be Prior Rights Flight Engineers, Second
Officers, and Permanent Flight Engineers listed on the World Airways, Inc. Prior
Rights Flight Engineers Seniority List and the Pilots Seniority List.

40
<PAGE>

ARTICLE XXVIII

General Conditions
------------------

Section A. This Agreement, when accepted by the parties hereto and signed
---------
by the respective representative duly authorized, shall constitute the sole
agreement between them involving the Crewmembers covered by this Agreement. Any
alteration or modification of this Agreement must be made by and between the
parties hereto and must be in writing.

Section B. In the event any provision of this Agreement is declared
---------
invalid by any competent court or government agency on account of existing or
future legislation, such invalidation shall not affect the remaining provisions
of this Agreement.

Section C. Nothing in this Agreement shall be construed to limit or deny
---------
any Crewmember hereunder any rights or privileges to which he may be entitled
under the provisions of the Railway Labor Act, as amended

Section D. The Company will provide Crewmembers with Company Manuals,
---------
Company insignia and the raincoat required to be worn by the Crewmembers while
on duty. The Crewmembers will be responsible for such items and will, if such
items are lost or negligently damaged, be required to reimburse the Company for
the cost of replacements. Upon termination the Crewmember must return such
items or reimburse the Company for the cost thereof.

Section E. No Crewmember will be required to pay for any Company aircraft
---------
damaged while in the service of the Company.

Section F. The Company shall pay for all visa and necessary photos and
---------
inoculations required of Crewmembers and where practicable the Company will
obtain such visa. The Company shall also pay for or provide all necessary
photographs for passports and visas.

Section G. In-flight meals will be provided without cost by the Company
---------
for all Crewmembers while assigned to flight on Company aircraft.

Section H. No Crewmember shall be required to accept a position in a
---------
supervisory or management capacity.

Section I. No Crewmember when dead heading by surface transportation shall
---------
be required to drive any vehicle.

Section J. A Crewmember, unless on furlough status or unless otherwise
---------
authorized by the Company, shall devote his entire professional flying service
to the Company.

Section K. The Union shall appoint a Professional Standards Committee,
---------
composed of Crewmembers which shall confer with the Company on matters
pertaining to the professional proficiency of Crewmembers. Members of this
Committee shall be permitted to observe any training period or proficiency
check. The Union shall appoint a Safety Committee, composed of Crewmembers,
which shall confer with the Company on matters pertaining to safety of
operations. A member of each of these Committees shall be permitted to attend
any hearing or investigation of an accident or incident of Company aircraft
operated by Crewmembers covered by this Agreement, subject to the regulations of
the government agency involved. The Company will cooperate in releasing such
members to participate in such hearings consistent with reasonable scheduling
requirements.

Section L. All orders to Crewmembers involving change in assignment of
---------
Base, promotions, demotions, furloughs, leaves of absences, discipline, and
warning shall be stated in writing. All orders to Crewmembers involving a
change in assignment shall stipulate expenses authorized, if any, in connection
with such new assignment.

Section M. Crewmembers will not be required to participate in publicity or
---------
promotional activities.

Section N. The Company will provide adequate protective clothing for
---------
Crewmembers who are required to perform normal ground duties in any area where
such clothing is required.

Section O. A Crewmember who serves on a jury will receive no reduction in
---------
his guarantee during the period of such service. The Crewmember will also
retain his jury duty pay. All parties, however, recognize the necessity to
protect the service and all desire not to work an undue hardship on the Company
or other Crewmembers. Therefore, any Crewmember who receives notice of jury
duty will inform his supervisor and will cooperate with the Company in obtaining
a postponement from jury duty as required.

Section P. In accordance with the established policy of Company and the
---------
Union, the provisions of this Agreement will apply equally to all Crewmembers
hereunder regardless of color, race, creed, sex, age, disability or national
origin. The Company and the Union also recognize the desirability of
implementing the national policy of providing equal opportunity to all persons
and agree to actively work toward the implementation and continuance of that
policy.

Section Q. Notwithstanding any other provisions of this Agreement, each
---------
Crewmember covered by this Agreement shall as a condition of employment and
continued employment, be required at Company expense to apply for, secure and
maintain a Security Clearance to the level required by the Government
Contracting Agency.

Section R. 1. Crewmembers performing "engine out" ferry flights, or any
---------
flight which requires a Ferry Permit, or waiver of the F.A.R.'s or any test
flight out of overhaul, shall be covered by the insurance provision outlined in
Article XXIV, Section C.

2. The pilot-in-command on all engine out ferry flights shall be a
management or check Crewmember. In the event a management or check Crewmember
is not available, the Company may, designate a line crew to operate such flight
if they so agree.

41
<PAGE>

Section S. The Captain shall not be required to accept the aircraft,
---------
unless all three axes of the autopilot are operative except to depart an airport
where no maintenance is available and proceed to a point where maintenance can
be provided.

Section T. A personnel file will be maintained for each Crewmember. Upon
---------
request at the time of the Crewmember's periodic proficiency check, the
Crewmember will be given the opportunity to review his file in the presence of a
Management Crewmember. In the event a Crewmember receives disciplinary action,
any portion of his file to be relied on by the Company in support of such
disciplinary action shall be open for review upon request by the Union
representative and the Crewmember. The Company cannot use any disciplinary
notices in support of disciplinary action if the Crewmember had not been
Provided with written notice of prior disciplinary action at the time discipline
was assessed, which action is subject to the Grievance Procedure, Article XXII.

Section U. The Union recognizes the right of the Company to "Lease" an
---------
aircraft to another Company at such times as the Company is unable to obtain
sufficient business for the profitable operations of said aircraft. In such
event, the Company shall endeavor to arrange with the lessee to provide for the
employment of a full or partial complement of Crewmembers covered by this
Agreement and constitute a "wet lease" operation. If the Company's endeavors
are unsuccessful, it will upon request of the Union state in writing the reasons
as to why such employment is not acceptable to the lessee and will furnish the
following information: (l) the name of the Lessee and the duration of the
lease, (2) Crewmember Domicile, (3) number of crews and any special Crewmember
qualifications, (4) aircraft monthly guaranteed hours and expected aircraft
monthly hours, and (6) trip routing expected.

Section V. The Company will provide completed Navigational Flight Plans at
---------
all departure points for flights where automated navigation is required by
operating specifications. The flight will not be held if communication
difficulties make it impossible for the Company to make the Flight Plan
available.

Section W. Should there be any conflict between this Agreement and the
---------
Flight Engineers Prior Rights Clause, the Flight Engineers Prior Rights Clause
shall prevail.

Section X. Within sixty (60) days of ratification of this Agreement, the
---------
Company will provide each Crewmember with a copy printed and bound in a
convenient pocket size booklet. Any letters of under-standing, amendments, or
addenda subsequently agreed to shall be printed in a similar format and
distributed by the Company to each Crewmember, for inclusion in his copy of the
Agreement, within thirty (30) days after such changes or additions have been
made. Newly hired Crewmembers shall be issued a booklet on date of hire.

Section Y. The Company may "wet lease in" once for a period of ninety (90)
---------
days in any 12 month period commencing with the first day of the initial "wet
lease in" provided the Company consults with the Union concerning the necessity
and procedures for such lease and provides the Union with a minimum of ten (10)
days notice prior to instituting the "wet lease in." Additional wet leases in
may be mutually agreed to by the Company and the Union.

Section Z. During the classroom training of newly hired Crewmembers, the
---------
Company will make the classroom available for any after-hour Union orientation
meeting. The Company will notify the Union in advance of the training schedule
so that an appropriate time can be arranged and the Company will, during the
training period extend the Union's invitation for such orientation meeting.

Section AA. The Company will notify the Union each month of all new hires,
----------
terminations, recalls and/or furloughs. The notification will include the
employee's name, address, social security number, classification and date of
hire, termination, recall or furlough.

Section BB. Flights into a war zone shall be on a voluntary basis. The
----------
Company and the Union will discuss any contemplated flights into an area that is
considered to constitute a war zone.

Section CC. In the event the Company contracts with another air carrier to
----------
provide World Airways Cockpit Crewmembers with such air carrier and such
operation does not constitute a Subsidiary Operation as defined in Article XXXI,
such Crewmembers will be subject to all of the provisions of this Agreement.

Section DD. The Company will provide parking at bases. The Company will
----------
assist the Crewmember in obtaining employee parking rates or similar reduced
rates at the Crewmember's nearest major metropolitan airport.

Section EE. On extended range aircraft the Captain of Record is the Senior
----------
Bidline holder, if two bidline holders are aboard, otherwise it is the bidline
holder. If there are no bidline holders, then the Captain of record is the
Senior Captain.

Assumption of command by the First Office on extended range aircraft will
be the senior type rated bidline holder or senior IRO, or, if there are no
bidline holders, then the senior First Officer.

On extended range aircraft the Pilot in Command may be designated by the
Chief Pilot or he may designate the First Officer to assume command based on
operational experience for reasons of safety with prior notice to the Union,
(this is an exception to the rule).

On non-extended range aircraft the PIC and SIC are the same as the extended
range aircraft.

Section FF. World Airways, Inc. (the Company) and the International Brotherhood
----------
of Teamsters (the Union) hereby agree to establish an Executive Committee as
follows:

The Executive Committee shall consist of two senior Company officers and
two active World Airways cockpit

42
<PAGE>

crewmembers appointed by the Union. The purpose of the Executive Committee is to
discuss topics related to the Company's business.

ARTICLE XXIX

Travel Policy
-------------

Section A. The World Airways, Inc. Employee Travel Policy that has been
---------
mutually agreed upon by the Company and the Union will remain in effect for the
period of this Agreement unless mutually modified by the parties.

Section B. If the Company is required by law or regulation to impute
---------
taxable income for any travel privileges provided by such policy it shall set up
appropriate administrative procedures to arrange for such payment, e.g., payment
at an approved withholding rate for the value of the pass(es) or ticket(s) at
time of issue, or withholding from the employee's paycheck at withholding rates
as authorized in appropriate regulations. The employee will assume full
responsibility for unused pass(es) or ticket(s).

Section C. The Company will furnish each employee with an Airline
---------
Interline Agreement List bi-annually or when there are substantial changes,
whichever is sooner. The Company will endeavor to arrange favorable travel
agreements for the employees and retirees.

ARTICLE XXX

Management Crewmembers
----------------------

Section A. Definition. Management Crewmembers are defined as those
----------------------
Crewmembers participating in the establishment and implementation of Company
policies related to flight operations and the supervision of Crewmembers,
including the making of decisions affecting the status of Crewmembers, as
provided in this Agreement, and such Management Crewmembers will not exceed the
greater of seven (7) Crewmembers or four percent (4%) of the Crewmembers on the
active payroll during any month.

Section B. Designation. The Company will provide the Union with a list of
-----------------------
its Crewmembers covered under this Article as of the effective date of this
Agreement and will notify the Union of any changes in such designations as they
are made.

Section C. Out-of-Seniority Flying. Management Crewmembers may be
-----------------------------------
assigned to out-of-seniority flying subject to the limitations set forth in this
Section.

1. The total number of Management Crewmembers who may be assigned to
out-of-seniority flying will not exceed the seven (7) Management Crewmembers on
the active payroll during any month. Such Management Crewmembers will consist
of the top seven (7) flight operations management personnel who will be listed
annually.

2. Each individual Management Crewmember is restricted to no more than
thirty (30) scheduled hours out-of-seniority flying in any month.

3. The total hours of Management Crewmember flying is limited to Type
flown to the greater of thirty (30) scheduled hours or ten (10) scheduled hours
for each aircraft of that Type.

4. Crewmembers filling positions in the Company other than management and
supervision of the flight operations department may not perform out-of-seniority
flying.

5. The purpose of out-of-seniority management flying, as discussed in
this section, is to permit such Crewmembers to maintain proficiency in those
types of aircraft over which they may have responsibilities but their seniority
does not permit them to hold the appropriate Crew Class bid award.

Section D. Check and Special Assignment Crewmembers.
---------------------------------------------------

1. The Company may designate Crewmembers to serve as "Check Pilots" or
"Check Flight Engineers" if each Crewmember so designated agrees.

2. The Company may designate Crewmembers for special assignments to
assist Management Crewmembers or in other capacities within the Company if each
Crewmember so designated agrees. Out-of-seniority flying at a Temporary Base is
defined as that flying performed by a Management Crewmember which has been bid
by a more senior Crewmember in the same Crew Class and who has been denied such
flying. If a more senior Crewmember is assigned to such flying due to a lack of
qualified bidders, the out-of-seniority flying restriction no longer applies.
If the Management Crewmember is more senior than another Crewmember who is
either awarded or assigned the flying, the out-of-seniority restriction no
longer applies. Flying that involves a permanent position must be posted for
bid. If such flying is accomplished in excess of the out-of-seniority
restrictions by a Management Crewmember, the most senior Crewmember who bid and
was denied the position will be paid for the time at the higher Crew Class rate.
For example a B-747 First Officer bids and is

43
<PAGE>

denied a DC-10 Captain's Position. Subsequently, a Management Crewmember flies
sixty (60) hours in violation of the thirty (30) scheduled hour restriction.
During the same month, the First Officer flies seventy-five (75) hours as a B-
747 First Officer. The First Officer would be paid fifteen (15) hours B-747
First Officer's pay and sixty (60) hours DC-10 Captain's pay unless the seventy-
five (75) hours B-747 First Officer pay is greater. This does not restrict the
Company from exceeding these limits while the Crewmember(s) awarded the bid is
(are) being trained provided other qualified Crewmembers in that Crew Class
cannot perform such flying.

3. Such Crewmembers may not fly out-of- seniority and will be furloughed
in accordance with Article XI. The Company may, at its discretion, continue to
employ such individuals in their Check or Special Assignment positions when they
would otherwise be in a furloughed status, but may not assign them to revenue
flying duties.

4. Special Assignment Crewmembers may hold management, supervisory or
administrative positions in other departments.

5. The Company will notify the Union of any Check and Special Assignment
Crewmembers as specified in Section B. No more than eight percent (8%)
o(Pounds) the Crewmembers on the active payroll will be designated as Check and
Special Assignment Crewmembers.

Section E. General.
-------------------

1. Management Crewmembers are not required to pay Union dues or service
dues as set forth in Article XVIII. Check and Special Assignment Crewmembers
are required to pay Union dues or Service Fees as set forth in Article XVIII.

2. All Management and Check and Special Assignment Crewmembers will be
Crewmembers on the active World Airways Crewmembers Seniority Lists or retired
from such lists.

3. Management, Check and Special Assignment Crewmembers who are retired
are not permitted to fly revenue trips as defined in this Agreement.

4. Vacation and 144 Consecutive Hour Off bids of Management and Check and
Special Assignment Crewmembers will be handled separately from other
Crewmembers, will be processed by the Operations Department, and will be awarded
in seniority order. Once awarded, such bids can only be changed with the consent
of the affected Check or Special Assignment Crewmember.

ARTICLE XXXI

Subsidiary Operations
---------------------

Section A. If the Company contracts to operate aircraft for another air
---------
carrier or supply crews for another air carrier for a period of at least three
(3) months, all Crewmembers will be provided an opportunity to bid such flying
pursuant to the following terms and conditions:

1. Any Crewmember awarded a bid shall be frozen in such subsidiary
operation for the period of the contract with such air carrier and any renewal
of same, except that any such crewmember:

(a) May exercise his seniority to bid on an upgrading opportunity or
a transitioning to higher paid equipment at any Company Base if such
opportunity arises after such Crewmember has been in position at such
subsidiary operation for a period of twelve (12) months, or

(b) May exercise his seniority to displace at any Company Base after
such Crewmember has been in position at such subsidiary operation for a
period of Twenty-four (24) Months.

2. All other terms and conditions of the Agreement will be applicable to
the flying at such subsidiary operation. Changes in the terms and condition of
the Agreement to take account of changed conditions at such Subsidiary Operation
may be made by mutual agreement of the Company and the Union.

3. No Crewmember will be assigned to such subsidiary operation.

Section B. If the bidders are insufficient to staff the subsidiary
---------
operation, the Company may hire as needed to staff the operation and such
Crewmembers, with WOA retired Crewmembers given first consideration, will not be
covered by Article XXVI Retirement Plan, but will be covered by flight and duty
time limitations of this Agreement. Separate seniority preference lists will be
maintained at such subsidiary operation for seniority preference applicable to
flying at such subsidiary operation. Crewmembers on the World Airways
Crewmember seniority lists will have preference on such lists. Employees hired
for such subsidiary operation will not be placed on the World Airways
Crewmembers Seniority Lists and will be terminated when surplussed at that
operation.

44
<PAGE>

Section C. In the event of furlough at any Base Crewmembers will have no
---------
rights of displacement of any Crewmember at such subsidiary operation, including
any displacement of World Airways Crewmembers who bid such positions and any
persons hired as Crewmembers for such subsidiary operation.

Section D. It is understood that the air carrier with whom the Company
---------
contracts may require that some positions in the cockpit be staffed by their
personnel and that those positions will not be available to the Company's
Crewmembers. These employees will be governed by the flight and duty time
limitations of this Agreement.

Section E. Any upgrading opportunities at such subsidiary operation will
---------
be bid as provided in Section A of this Article. Increased requirements at such
subsidiary operation will be posted for bid. Full displacement rights will be
available to Crewmembers on the World Airways Crewmember seniority list whenever
Crewmembers are surplussed from such subsidiary operation.

ARTICLE XXXII

Basing and Commuting
--------------------

Section A. All crewmembers who choose to travel from a point other than
---------
their base to the point of origination of a duty assignment and/or return from
the point of termination of a duty assignment to a point other than the base
shall be permitted to do so provided they assume the obligation of paying any
additional differences in cost from a movement to or from their base. Each
individual movement stands alone. This policy does not include a bank for
---
credits against any other movement.

For anyone availing themselves of this policy, all pay or pay factors such
as but not limited to Duty Time, Per Diem, THP, and Deadhead shall be
constructed as if the movement is to or from their base. The current policy
covering movements to and from an intentional point shall remain the same.

Section B. Crewmembers who are awarded/assigned a vacancy at any Base will
---------
not be required to reside in the area of such Base but are required to be
available for flying wherever they may reside.

ARTICLE XXXIII

Duration
--------

Section A. This Agreement shall become effective on the date of execution
---------
unless otherwise specifically noted, and shall continue in full force and effect
until June 30, 1998 and shall renew itself until each successive July 1,
thereafter, until written notice of an intended change is served in accordance
with Section Six (6), Title 1 of the Railway Labor Act, as amended, by either
party hereto at least thirty (30) days (but not more than one hundred twenty
(120)) days prior to July 1, 1998 or July 1 of any subsequent year.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the
12th day of December, 1994.

ON BEHALF OF THE:

INTERNATIONAL BROTHERHOOD OF TEAMSTERS

By_____________________ By______________________
D.R. Treichler Ray Benning
Business Representative Int'l. Brotherhood of Teamsters

COCKPIT CREWMEMBERS

By___________________ By_____________________
T.F. Leveley N. Manes
Chairman, Executive Council Captain's Representative

By___________________ By_____________________
M.A. Ohlau W.E. Rayner

First Officer's Representative Flight Engineer's Representative

By___________________
E.L. Tavarez
Member-at-Large Representative

ON BEHALF OF WORLD AIRWAYS, INC.

By___________________ By_____________________
V. Fort J. DeWitt
Executive Vice President Consultant

By____________________
D. Black
Director of Finance

FLIGHT ENGINEER PRIOR RIGHTS CLAUSE
-----------------------------------
Section A.
---------

1. The Company, its successors or assigns, agrees that all Flight
Engineers in the employ of the Company, including those on furlough, on the date
of the signing of this agreement, are recognized as having prior rights to serve
as Flight Engineers on all aircraft operated by the Company over all other
Crewmembers employed presently or in the future. The Flight Engineer specified
herein are those Flight Engineers whose names appear on the Flight Engineers
Seniority List dated July 1, 1970, and attached hereto as Appendix A.

2. Such prior rights shall continue until severance, retirement,
voluntary resignation, or discharge for just cause. This agreement shall
survive the duration of the basic agreement and succeeding agreements so long as
any Flight Engineer covered herein is employed by the Company as a Flight
Engineer.

3. The parties hereto, irrevocably waive the right to serve any Section 6
notice, under the Railway Labor Act, of any intended change which, if adopted,
would have the effect of modifying

45
<PAGE>

provisions contained herein or otherwise to require bargaining as to such
provisions.

4. These prior rights shall include Flight Engineer positions on all
aircraft operated by the Company, now or in the future, that are required by law
or Federal Regulation to include a Crewmember whose duty it is to perform the
Flight Engineer (third crewmember) function.

5. The agreement to guarantee Flight Engineers the prior rights defined
herein shall be made directly with and on behalf of each individual Flight
Engineer because of his past service with the Company, to be legally enforceable
by him pursuant to the provisions of the grievance form attached as Appendix B
to the original executed copy hereof, and shall be given to each Flight
Engineer.

Section B.
---------

1. The Company may, at its option, after the date of this agreement,
employ Crewmembers to fill the Flight Engineer position who meet the
qualifications established by the Company and/or the Federal Aviation
Administration, subject to the prior rights stated herein.

2. All Crewmembers hired subsequent to the date of this agreement shall
be placed at the bottom of the Pilots Seniority List. When any Crewmember from
the Pilots Seniority List is assigned to fill a Flight Engineer vacancy, his
name shall be placed at the bottom of the Flight Engineers Seniority List for
bidding purposes only. He shall continue to hold his Seniority Position on the
Pilots Seniority List, and shall hold no Seniority whatever on the Flight
Engineers Seniority List. Such Crewmembers shall enjoy no prior rights
specified herein.

Section C.
---------

1. Flight Engineers covered herein who meet the requirements for
employment as Pilots with the Company, may at their option bid for positions as
First Officer, and upon their successful completion of training have their name
removed from the Flight Engineers Seniority List and placed at the bottom of the
Pilots Seniority List. When a Flight Engineer, entitled to prior rights herein,
bids for a position as a First Officer, he shall be considered senior to all
Pilots hired subsequent to the date of this agreement. Flight Engineers who fail
to exercise this option within 5 years from the date of this agreement shall be
deemed to have forfeited their rights to this option.

2. Should a Flight Engineer not satisfactorily complete training as a
First Officer, he may exercise his Prior rights and continue to hold his
position as a Flight Engineer as provided herein, and forfeit any right to any
further pilot training.

3a. Should a Flight Engineer who has qualified as a First Officer be
unable to meet the requirements for a Pilot within 1 year following his
qualification as a First Officer, he may exercise his prior rights and return to
his former position as a Flight Engineer in his former Seniority Position.

3b. Should a Flight Engineer who has qualified as a First Officer be
unable to meet the requirements for a Pilot after 1 year following his
qualification as a First Officer, he may exercise his prior rights and return to
his former position as a Flight Engineer junior to the least senior Flight
Engineer entitled to prior rights as specified herein. He will retain prior
rights as specified in Section A.1 above.

4. Prior rights cease when a Flight Engineer who has been upgraded to
First Officer completes 1 year in such position. Sections C-3b and C-6 herein
are exceptions and will remain in effect until said Flight Engineer is qualified
as a Captain, at which time all prior rights cease.

5. No Flight Engineer covered herein shall be furloughed as long as any
Pilot is serving as a Flight Engineer. The prior rights specified herein shall
survive any furlough and recall.

6. Any Flight Engineer who has qualified as a First Officer may exercise
his prior rights to return to his former position as a Flight Engineer junior to
the least senior Flight Engineer entitled to prior rights herein, prior to
accepting furlough as a Pilot. Such Flight Engineer shall, however, be
required to return to his First Officer's position in his proper order of recall
from furlough as a Pilot.

Section D.
---------

Flight Engineers covered herein shall be paid the same rate of pay as First
Officers. New rates of pay and working conditions as negotiated in subsequent
agreements shall become effective on the same date as for other Crewmembers.

Section E.
---------

In the event any Flight Engineer entitled to prior rights as specified
herein, is required by any government or Company regulation to possess
additional qualifications and/or licenses, than those required at the time this
agreement is signed to fulfill his function as Flight Engineer, the Company
shall provide all training necessary to obtain such additional qualifications
and/or licenses on Company time and at Company expense.

Section F.
---------

Flight Engineers having qualified as First Officers shall be henceforth
considered as Pilots and will not be permitted to bid alternating positions as
Pilot and Flight Engineer. His prior rights shall be limited to those specified
in Section C-3b and C-6 herein.

46
<PAGE>

Appendix A

World Airways, Inc.
Flight Engineers-System Seniority List

July 1, 1970
(As Amended August 15, 1994)

Number Name Date of Hire Date of Birth
------ ---- ------------ -------------
<C> <S> <C> <C>
1 Chaika, M.W. 05-16-61 05-23-26
2 Witham, W.W. 08-04-61 06-05-33
3 Daughtry, L.J. 10-19-61 05-11-27
4 Stewart, C.W. 11-09-61 05-01-32
5 Tavarez, E.L. 06-12-62 01-30-30
6 Tam Sing, J.H. 07-28-62 12-30-30
7 Huffines, B.L. 10-31-62 08-17-28
8 Kalange, G.R. 10-06-64 02-18-29
9 Gross, H.J. 03-07-66 04-08-29
10 Kohler, F.E. 03-07-66 02-01-37
11 Douglas, R.P. 03-07-66 08-08-38
12 Rayner, W.E. 04-25-66 03-08-32
13 Lanning, P.M. 04-25-66 03-05-36
14 Wallace, E.F. 05-15-67 12-20-29
15 Mros D. F. * 06-30-67 01-05-33
16 Smock, H. L. 08-26-68 09-17-31
17 Martin, E. S. 08-26-68 12-07-36
18 Tucker, J. L. * 09-30-68 09-18-37
</TABLE>
* Date Of Hire adjusted In accordance with Article 10, Section E.

Appendix B

Dear Flight Engineer:

In consideration of your past services with World Airways, Inc. and of your
acceptance of the rights and obligations set forth In the Flight Engineers Prior
Rights Clause annexed hereto, the undersigned parties to that Agreement agree
and represent to you that the terms and conditions thereof are binding upon
them, their successors and assigns, are made with you and for your benefit as an
individual Flight Engineer in the employ of World Airways, Inc. and will remain
in effect so long as you remain in the employ of World Airways, Inc., their
successors and assigns, as Flight Crewmember entitled to prior rights or retain
recall rights.

In the event that you have any dispute, claim or grievance arising out of or
relating to the interpretation or application of the aforesaid Agreement, you
are entitled to have such dispute, claim or grievance handled under the regu1ar
grievance procedures specified in the Basic Agreement then in effect.

The aforementioned Flight Engineers Prior Rights Clause is subject to change
and the provisions thereof to modification only by the unanimous agreement of
the undersigned parties and a majority of the Flight Engineers then in the
employ of the Company as a Flight Crewmember entitled to Prior Rights or who
retain recall rights.

47
<PAGE>

LETTERS OF AGREEMENT

ATTACHED TO THE

COLLECTIVE BARGAINING AGREEMENT

DATED December 12, 1994.

Effective Contract Dates

Retroactivivity Payments and Provision for the Retroactivity and Profit Sharing
Bonus Plan

Retroactivity and Profit Sharing Bonus Plan

MD-11 Lump Sum Pay

217
<PAGE>

LETTER OF AGREEMENT
BETWEEN
WORLD AIRWAYS, INC. and The
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
Concerning Effective Dates of Contract Provisions

1. Crewmembers on the World Airways, Inc. Crewmembers' Seniority List as of
July 1, 1994 will not receive a rate of pay less than that provided for in the
December 12, 1994 Agreement.

2. The pay rates, benefits, and working conditions set forth in the December
12, 1994 Agreement are effective on August 15, 1994, except medical benefit and
premium changes will be implemented by the Company as expeditiously as is
feasible. Wage increases effective August 15, 1994 are due and payable
immediately.

3. Unless otherwise specifically set forth herein, or in the Agreement, all
other terms and conditions are effective August 15, 1994.

/s/ V. Fort /s/ D. Treichler
_________________________ _________________________
V. Fort D. Treichler
World Airways, Inc. Int'l. Brotherhood of Teamsters
Dated: December 12, 1994 Dated December 12, 1994

218
<PAGE>

LETTER OF AGREEMENT
BETWEEN
WORLD AIRWAYS, INC.
AND THE
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
PROVIDING FOR RETROACTIVITY PAYMENTS AND
A PROFIT SHARING BONUS PLAN

World Airways, Inc. (the Company) and the International Brotherhood of
Teamsters (the Union) hereby enter into an Agreement dated December 12, 1994
providing payment of DC-10 crewmembers retroactivity pay for the period of 7-1-
92 through 6-30-93 of 2.9% and the period of 7-1-94 through 8-15-94 of 2.7% to
be paid out of Company profits as set forth in the Retroactivity Payments and
Profit Sharing Plan dated December 12, 1994 and effective January 1, 1994 until
payment of retroactivity in full or June 30, 1998, whichever is later, under the
provisions setting forth priority payments under conditions set forth below:

219
<PAGE>

1. The Company agrees that it will adopt the Retroactivity Payments and
Profit Sharing Plan; and

2. The Company agrees that it will not exercise its rights as set forth in
Article VII of the Plan to amend or terminate the Plan without the concurrence
of the Union except for amendments as specified in Article 2.2 (modification of
the Plan's earnings definition following completion of the Priority Payments for
DC-10 Retroactivity Payments as set forth therein) unless the parties mutually
agree.

World Airways, Inc. Int'l. Brotherhood of Teamsters

/s/ V. Fort /s/ D. Treichler
______________________ ________________________
V. Fort D. Treichler

Dated December 12, 1994 Dated December 12, 1994

220
<PAGE>

WORLD AIRWAYS, INC.
RETROACTIVITY AND
PROFIT SHARING BONUS PLAN

World Airways, Inc. (hereinafter referred to as the "Company") hereby adopts
this Retroactivity and Profit Sharing Bonus Plan as of January 1, 1994.

W I T N E S E T H
- - - - - - - - -

WHEREAS, the Company wishes to promote in its employees an interest in the
successful operation of the company;

WHEREAS, the Company desires to assure the employees that they will have an
opportunity of additional income based on the Company's earnings;

WHEREAS, the Company desires to amend the formula for the payment of profit
sharing bonuses following completion of Priority Payments;

NOW, THEREFORE, the Company hereby adopts this following Retroactivity and
Profit Sharing Bonus Plan.

ARTICLE 1
---------

221
<PAGE>

DESIGNATION OF PLAN
-------------------

1.1 Name. This plan shall be known as the World Airways, Inc.
----
Retroactivity and Profit Sharing Bonus Plan and is referred to herein as the
"Plan". The effective date of this Plan is January 1, 1994.

ARTICLE 2
---------

1.1 Compensation. Compensation means all compensation paid by the
------------
Company to a Participant in cash by reason of services performed as an Employee
during the Plan Year and reflected on the Form W-2 for such Employee, including
any compensation set aside for any IRS Section 401(k) Plan: excluding, however,
with respect to any employee, the following;

(a) Any compensation paid to the Participant contributed by the Company
pursuant to this Plan:

(b) Any compensation paid or payable by reason of services performed for
any period in any Plan Year with respect to which the employee was not a
Participant;

222
<PAGE>

(c) Any compensation paid on an irregular or discretionary basis as bonuses
or special awards, or any compensation paid as severance pay; and

(d) Any amounts which may be included in the Form W-2 which relate to
reimbursable expenses, such as per diem expenses, moving expense reimbursement,
automobile allowances or subsistence allowance.

2.2 Earnings. Earnings are defined for the purposes of this Plan as the
--------
Company's operating income less net interest expenses determined by the
Company's audit under generally accepted accounting principles for the Fiscal
Year until all retroactivity payments set forth under the Retroactivity Letter
of Agreement, dated December 12, 1994, have been paid. When payment of said
retroactivity payments have been completed, earnings then will be defined for
the purposes of this Plan as the Company's net income for items such as, but not
limited to, debt cost attributed to World Airways and before non-operating
gains. The Company's auditors will provide certification in writing that its

223
<PAGE>

determination of the Earnings of World Airways, Inc. is in accord with generally
accepted accounting principles and that the costs, expenses, debt, and income
between WorldCorp and its subsidiaries is fairly allocated as regards World
Airways, Inc. Such certified statement of the auditor as to the determination of
the Company's Earnings is final and binding on the Company, Participants in this
Plan and all other persons or organizations.

2.3 Eligibility Date. Eligibility Date means the first day of the
----------------
calendar month after the Employee has completed his or her first Service Year.

2.4 Employee. Employee means any person employed by the Company on a
--------
full-time or regular part-time basis.

2.5 Company. means World Airways' Inc., and any successor corporation by
-------
reason of merger, purchase or otherwise, If such successor corporation elects to
continue the Plan.

224
<PAGE>

2.6 Fiscal Year or Plan Year. Fiscal Year or Plan Year means the fiscal
------------------------
year of the Company, which is currently the calendar year.

2.7 January 1994 Formula. The January, 1994 Formula means the formula set
--------------------
forth for the payment out of profits of the Retroactivity described in the
December 12, 1994 Retroactivity Letter of Agreement.

2.8 Participant. Participant means any Employee of the Company who is
-----------
admitted to participation in this Plan as of the Participant's Eligibility Date.

2.9 Participant's Profit Participation. Participant's Profit Participation
----------------------------------
means that portion of the Profit Sharing Bonus allocable to a Participant.

2.10 Priority Payments. Priority Payments are payments to persons who are
-----------------
due Retroactivity payments and who are entitled to payment of such payments as
provided here.

225
<PAGE>

2.11 Profit Sharing Bonus. Profit Sharing Bonus means the total amount of
--------------------
the Company's contribution to the Plan for a Plan Year as provided in Article 4.

2.12 Service Year. A Service Year means twelve (12) calendar months'
------------
active service as an Employee, Active service for this purpose means all
accumulated time commencing with date of hire for which the Employee is paid by
the Company. A month of service will be credited if the Employee is in pay
status for fifteen (15) days or more in any month.

ARTICLE 3
---------

PARTICIPATION OF EMPLOYEES
--------------------------

3.1 Eligibility. Each Employee will be a Participant in this Plan upon
-----------
the Employee's attainment of his Eligibility Date, and the Employee will
continue as a Participant until the date of his termination as an employee at
which date he will cease to be a Participant.

3.2 Participation Requirements. In order to participate in the
--------------------------
allocation of the Profit Sharing Bonus for any Plan Year, a

226
<PAGE>

Participant must be an Employee of the Company as of December 31 of that Plan
Year.

ARTICLE 4
---------

PROFIT SHARING BONUS
--------------------

4.1 Amount of Payment. With respect to each Plan Year, the Company shall
-----------------
contribute as a Profit Sharing Bonus for such Plan Year twenty percent (20%) of
the Company's Earning, not to exceed ten percent (10%) of the total of
Compensation of all Participants in this Plan, such amount to be allocated, in
accordance with Article 5, first, to persons entitled to Priority Payment and,
-----
second, after all Priority Payments are made, to Participants in this Plan.
------

4.2 Payments. Payments for any Plan Year for which there is a Profit
--------
Sharing Bonus shall be paid within ninety (90) days after the Company's parent,
WorldCorp, files its 10-K. No interest or other additions shall be made to the
amount of a Participant's Profit Participation, regardless of the date of
payment thereof.

ARTICLE 5
---------

227
<PAGE>

ALLOCATION OF PROFIT SHARING BONUS
----------------------------------

5.1 Allocation of Priority Payments. The Profit Sharing Bonus as defined
-------------------------------
in Article 4 shall first be allocated to persons entitled to Priority Payments.
Prior Payments shall be in the total amount of retroactivity on a dollar for
dollar basis and shall be allocated to all persons (including beneficiary(ies)
of such persons) in such a manner that each person receiving retroactivity will
receive an amount equal to the Profit Sharing Bonus for the Plan Year multiplied
by a fraction, the numerator of which the total amount of such person's
retroactivity due and the denominator of which is the total retroactivity of all
such persons. Such Priority Payments will be made each Plan Year until the full
amount of retroactivity is paid, at which time such contingent obligation will
be fully satisfied and the Profit Sharing Bonus will be allocated to Participant
pursuant to Section 5.2. If the Priority Payments are concluded in any Plan
Year, any remaining Profit Sharing Bonus will be allocated to Participants as
provided in Section 5.2. If a person entitled to Priority payments is deceased,
such Priority

228
<PAGE>

Payments will be made to such person's designated beneficiary(ies) as set forth
in Section 5.3 of this Article.

5.2 Allocation of Participant Payments. After Priority Payments have been
----------------------------------
made, the remainder of the Profit Sharing Bonus as defined In Article 4 shall be
allocated to Participants in such a manner that each Participant will receive an
amount equal to the remainder of the Profit Sharing Bonus multiplied by a
fraction, the numerator of which is such Participant's Compensation for the Plan
Year and the denominator of which is the total Compensation paid to all
Participants for such Plan Year.

5.3 Beneficiary Payments. Payments to beneficiary(ies) of a person
--------------------
entitled to Priority Payments who is deceased at the time of payment will be
made to the beneficiary or beneficiaries designated by such person on Company
records for the payment of life insurance benefits. If no such designation was
made or the records cannot be located, such payment will be made to the estate
of such person or, if there was no estate or the estate is

229
<PAGE>

closed, to the heir or heirs of such person as defined by the laws of the State
of California.

ARTICLE 6
---------
SPENDTHRIFT PROVISIONS
----------------------

6.1 Spendthrift Provisions. Except as herein provided, no Participant or
----------------------
Beneficiary shall have any transmissible interest in the Plan or in his or her
separate profit participation, either before or after the vesting thereof, or in
any of the assets comprising the same, prior to actual payment and distribution
thereof to him or her and shall have no power to alienate, dispose of, pledge or
encumber the same, nor shall the Company recognize any assignment thereof,
either in whole or in part.

ARTICLE 7
---------
AMENDMENT OR TERMINATION OF PLAN
--------------------------------

7. 1 Term. The term of this Plan shall continue indefinitely until
----
terminated by the Company. The Company retains the right to terminate this Plan
any time during the Plan Year, effective for the following Plan Year and
subsequent Plan Years by giving prior

230
<PAGE>

written notice to the Participants. The Company may terminate this Plan during
Plan Year, effective for that Plan Year and subsequent Plan Years, by giving
written notice to Participants within the first ninety (90) days of such Plan
Year.

7.2 Amendment. The Company shall have the right to amend this Plan at any
---------
time to any extent that it may deem advisable, upon prior written notice to
Participants, except that no amendment that would have the effect of reducing
the Company's Profit Sharing Bonus for any Plan Year shall be effective for such
Plan Year unless adopted within the first ninety (90) days of the applicable
Plan Year. Any amendment shall be stated in an instrument in writing of equal
formality as this instrument and formally adopted by resolution of the Board of
Directors of the Company (or a duly authorized committee thereof), whereupon
this Plan shall be deemed to have been amended in the manner therein
set forth and Participants shall be bound thereby. The Company shall have the
sole and absolute right to interpret the

231
<PAGE>

Plan and any interpretation of the Company shall be final and conclusive.

ARTICLE 8
---------
MISCELLANEOUS
-------------

8.1 Not Employment Contract. The adoption and maintenance of the Plan
-----------------------
shall not be deemed to be a contract between the Company and any Employee.
Nothing herein contained shall be deemed to give to any Employee the right to be
retained In the employ of the Company or to interfere with the right of the
Company to discharge any Employee any time, nor shall it be deemed to give the
Company the right to require any Employee to remain in its employ.

World Airways, Inc. Int'l. Brotherhood of Teamsters

/s/ V. Fort /s/ D. Treichler
______________________ ________________________
V. Fort D. Treichler

Dated December 12, 1994 Dated December 12, 1994

232
<PAGE>

LETTER OF AGREEMENT
BETWEEN
WORLD AIRWAYS, INC.
AND THE
INTERNATIONAL BROTHERHOOD OF TEAMSTERS
PROVIDING MD-11 LUMP SUM PAY

World Airways, Inc. (the Company) and the International Brotherhood of
Teamsters (the Union) hereby agree that all pilots flying the MD-11 as of August
15, 1994 shall receive a lump sum payment of $2,600.00 each to be paid as
follows:

<TABLE>
<S> <C>
September 15, 1994 $650.00
December 15, 1994 $650.00
March 15, 1994 $650.00
May 15, 1994 $650.00
</TABLE>

World Airways, Inc. Int'l. Brotherhood of Teamsters

/s/ V. Fort /s/ D. Treichler
_______________________ ________________________
V. Fort D. Treichler

Dated December 12, 1994 Dated December 12, 1994

233

<PAGE>

Exhibit 10.99

August 25, 1994

Mr. William F. Gorog
1307 Daviswood Drive
McLean, VA 22102

Re: Compensation as WorldCorp Chairman of the Board
-----------------------------------------------

Dear Bill:

As Chairman of the Compensation Committee of the Board of Directors of
WorldCorp, Inc. ("WorldCorp" or the "Company"), and as a member of the Board of
Directors of US Order, Inc. ("US Order"), we are delighted to confirm for you
the principal terms pursuant to which you will be compensated, effective this
date, for your services in 1994-1995 as Chairman of the Board of Directors of
the Company and of the Board of Directors of US Order.

1. Compensation as US Order Chairman.
---------------------------------

. Your annual compensation for serving as Chairman of the Board
and Chief Executive Officer of US Order shall be $250,000 per year,
payable directly by US Order, in 26 bi-weekly installments of
$9,615.40.

2. Compensation as WorldCorp Chairman.
----------------------------------

. Cash Compensation. You shall be paid $50,000 per year
-----------------
for your service as Chairman of the Board of WorldCorp, payable
in advance in quarterly installments of $12,500 each.

. Stock Options. (a) You are granted 250,000 options to
-------------
purchase WorldCorp Common Stock under WorldCorp's 1988 Amended and
Restated Stock Option Plan, at an exercise price of $4.50 per share.
100,000 of the options are vested immediately. The remaining 150,000
options will be vested on May 25, 2004; provided, however, that the
-----------------
remaining 150,000 options shall vest earlier than May 25, 2004 in
increments of 25,000 options, if WorldCorp's Common Stock trades for
20 days on the NYSE at or above an average price at the following
thresholds:
<PAGE>

Mr. William F. Gorog
August 25, 1994
Page Two

<TABLE>
<CAPTION>
Accelerated Vesting Stock Price
------------------- -----------
<S> <C>
25,000 $ 5.63
25,000 $ 7.03
25,000 $ 8.79
25,000 $10.99
25,000 $13.73
25,000 $17.17
</TABLE>
All of the other terms of your stock options will be set forth in
a stock option agreement, the form of which is attached hereto as
Attachment 1.
------------

(b) You agree to hold the following amounts of WorldCorp stock
for the balance of the term of this Agreement, from the earlier to
-------
occur of (1) your exercise of options in the amounts set forth below;
or (2) the dates indicated below. For purposes of this Agreement, any
shares of WorldCorp stock owned by members of your immediate family
(i.e., spouse, sons or daughters) shall be counted toward your
WorldCorp stock ownership and holding requirements.
<TABLE>
<CAPTION>

Required
Options Exercised Date Common Stock Holdings
------------------- ------------- ---------------------
<S> <C> <C>

125,000 April 1, 1995 8,500
150,000 April 1, 1996 12,500
175,000 April 1, 1997 16,500

</TABLE>

. Business Expenses. You shall be entitled to reimbursement of
-----------------
business-related expenses consistent with WorldCorp's policies.

. Employee Benefits. You shall be entitled to all employee
-----------------
benefits made available now or in the future to other officers of
WorldCorp. In the event you leave your position as WorldCorp Chairman
for any reason other than death or for cause, you may participate in
WorldCorp's health and other benefit programs for one year for each
year of your service on the WorldCorp Board since 1989, on the same
terms available to the most senior executives of WorldCorp or its
affiliates, or until you obtain comparable coverage, whichever is
earlier.
<PAGE>

Mr. William F. Gorog
August 25, 1994
Page Three

. Life Insurance. WorldCorp will maintain key-man life
--------------
insurance on you in the amount of $1,000,000 during your employment as
Chairman of the Board of WorldCorp, payable to your estate in the
event of your death.

On behalf of the Boards of WorldCorp and US Order, thank you very much for
your past contributions. We wish you good health and continued success in your
positions.

With best regards, we remain

Very truly yours,

WORLDCORP, INC. US ORDER, INC.

By: /s/ Signature Appears Here By: /s/ Signature Appears Here
------------------------------------- --------------------------------
Name: ____________________________________ Name:______________________________
Title: __________________________________ Title:_____________________________

disk loc drew 5
file loc. billcomp

<PAGE>

Exhibit 10.100

AMENDMENT NO. 3 TO STOCK RESTRICTION AGREEMENT
----------------------------------------------

AMENDMENT NO. 3, dated as of September 1, 1994 (this "Amendment"), to the
Stock Restriction Agreement, dated as of September 14, 1990, as amended by
Amendment No. 1 thereto dated as of August 29, 1991 and Amendment No. 2 thereto
dated as of March 31, 1993 (the "Stock Restriction Agreement"), by and among
WorldCorp, Inc., a Delaware corporation ("WorldCorp"), William F. Gorog,
Jonathan M. Gorog, Peter M. Gorog, Henry R. Nichols, William N. Melton and John
Porter.

WHEREAS, the parties to the Stock Restriction Agreement desire to amend
certain provisions thereof.

1. Defined Terms.
-------------

Capitalized terms used but not defined in this Amendment shall have the
meanings assigned to such terms in the Stock Restriction Agreement.

2. Amendments.
----------

(i) The first paragraph of Section 6 of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:

"6. OPTION TO PURCHASE FOUNDERS' SHARES. Subject
-----------------------------------
to the provisions of Section 6(b) hereof, the Founders hereby
grant to WorldCorp the option (the "Option"), exercisable
after September 10, 1991, to purchase 4,757,679 of the
outstanding shares of Common Stock held by such Founders
(the "Optioned Shares")."

(ii) Section 6(a) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

"(a) The exercise price of the Optioned Shares (the "Exercise Price") shall
be $3,885,249 payable as follows:

October 14, 1994 $ 400,000 Cash
171,261 WOA Shares

January 2, 1995 $1,394,500 Cash
$ 922,875 Worth of WOA shares
(see below for Valuation)
<PAGE>

For purposes hereof, WorldCorp Common Stock will be valued as follows: (1)
any WorldCorp Common Stock to be issued on October 14, 1994 shall be valued
based on the average closing price reported on the New York Stock Exchange
("NYSE") for the 30 day period from August 3, 1994 through September 2,
1994; and (2) any WorldCorp Common Stock issued on January 2, 1995 shall be
valued based on the average closing price reported on the NYSE for the 30
day period from December 2, 1994 through January 2, 1995."

(iii) Section 6(e) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

"(e) WorldCorp's option to purchase the Optioned Shares, granted under
this Section 6, shall be exercised at the times, and in the manner,
specified in Section 6(a) hereof."

3. Effect of Amendment.
-------------------

The Stock Restriction Agreement shall remain in full force and effect as
modified by this Amendment.

4. Headings.
--------

The headings contained in this Amendment are for reference purposes only,
shall not be deemed a part of this Amendment and shall not affect in any way the
meaning or interpretation of this Agreement.

5. Counterparts.
------------

This Amendment may be executed simultaneously in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

2
<PAGE>

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the parties hereto as of the date first above written.

WORLDCORP, INC.

By: /s/ T. Coleman Andrews, III
------------------------------------------
Name: T. Coleman Andrews, III
President and Chief Executive Officer

WILLIAM F. GOROG

/s/ William F. Gorog
___________________________________

JONATHAN M. GOROG

____________________________________

PETER M. GOROG

/s/ Peter M. Gorog
____________________________________

HENRY R. NICHOLS

____________________________________

WILLIAM N. MELTON

____________________________________

JOHN PORTER

____________________________________

<PAGE>

EXHIBIT 10.101

AIRCRAFT SERVICES AGREEMENT
<TABLE>
<CAPTION>
<S> <C>
ARTICLE ONE: AIRCRAFT; PROVISION OF . . . 1
SERVICES
1.1.Aircraft. ......... 1
1.2.Service/Schedule........ 2

ARTICLE TWO: TERM ........
2
2.1.Term.......... 2

ARTICLE THREE: MINIMUM
GUARANTEED AIRCRAFT
UTILISATION. . 2
3.1.Minimum Monthly Block Hour
Guarantee. .... 2

ARTICLE FOUR: CHARGES
....... 2
4.1.Block Hour Rate. ....... 2
4.2Block Hour Definition.
...... 2
4.3.Block Hour Surcharge.
...... 2
4.4.Aircraft
Positioning/Painting Costs.
..... 3
4.5 Other payments........ 3

ARTICLE FIVE: PAYMENT . . . . . . . 3
5.1. Payment . . . . . . . 3
Schedule.
5.2. Payment . . . . . . 4
Instructions. .
5.3. Invoices. . . . . . . . . 4
5.4. Final . . . . . . . 5
Accounting.
5.5. Late Payment. . . . . . . . 5
5.6. No Counterclaims, . . . . . 5
Set-offs, etc.

ARTICLE SIX: RESPONSIBILITIES OF . . . 5
WORLD AND MAS.
6.1. Responsibilities Of . . . . . . 5
WORLD.
6.2. Responsibilities Of . . . . . . 6
MAS.
6.3. Payment . . . . . 8
Responsibilities Of MAS.
6.4. Reciprocal . . . . . . . 8
Payments

ARTICLE SEVEN: OPERATION OF THE AIRCRAFT . . . . 9
7.1. Control Of The . . . . . . 9
Aircraft.
7.2. Right Of . . . . . . 9
Substitution.
7.3. Lawful Use. . . . . . . . . 9
7.4. Regulatory . . . . . . 10
Compliance.
7.5. Cargo . . . . . . . 10
Restrictions.
7.6. Aircraft . . . . . . . 10
Livery.
7.7. Return Condition Of . . . . . 10
Aircraft.

</TABLE>

- i -
<PAGE>

<S> <C>
ARTICLE EIGHT: DOCUMENTATION. . . . . . . 10
8.1. Operating . . . . . . . 10
Permits.
8.2(a) Passenger . . . . . . 10
Documentation.
8.2(b) Cargo . . . . . . 11
Documentation.
8.3. MAS Notification . . . . . 11
to World.
8.4. Work . . . . . . . 11
Permits

ARTICLE NINE: SCHEDULE CHANGES; FLIGHT DISRUPTIONS. . . 12
9.1.Schedule Changes.
.......12
9.2.Flight Disruptions.
.......12

ARTICLE TEN: USE OF AIRCRAFT BY . . . . 14
WORLD.
10.1. Other . . . . . . . 14
Operations.
10.2. Crew Training; . . . . . 14
Duty Travel.

ARTICLE ELEVEN: EMPLOYEES. . . . . . . 14
11.1. Employees; Workmen's . . . 14
Compensation Insurance.

ARTICLE TWELVE: LIENS AND TAXES. . . . . . 15
12.1. Liens. . . . . . . . . . 15
12.2. Taxes. . . . . . . . . . 15

ARTICLE THIRTEEN: INSURANCE . . . . . . 16
13.1.WORLD Aircraft Hull
Insurance. .....16
13.2. WORLD Third Party Aviation . . 16
Legal Liability Insurance.
13.3.MAS Liability
Insurance. ......17
13.4.Loss of Insurance.
.......19

ARTICLE FOURTEEN: INDEMNIFICATION. . . . . . 19
14.1.Indemnification By
WORLD. .....19
14.2.Indemnification By
MAS. ......20
14.3.Employee Claims.
.......21
14.4.No Consequential
Damages. ......21
14.5.Mutual Assistance.
.......21

ARTICLE FIFTEEN - EARLY TERMINATION . . . . . 22
15.1.Grounds For Early
Termination. .....22
15.2.Return Of Equipment.
......24

ARTICLE SIXTEEN: DEFAULTS BY MAS . . . . . 24
16.1.Events Of Default By MAS. ......24
16.2.Remedies Of WORLD. ......26
16.3. Interest On Monies Owed. ......26

</TABLE>

- ii -
<PAGE>

<TABLE>
<S> <C>
ARTICLE SEVENTEEN: DEFAULTS BY WORLD. . . . . 27
17.1. Events Of Default
By WORLD. .....27
17.2.Remedies Of MAS.
.......28
17.3. Interest On Monies
Owed. ......28

ARTICLE EIGHTEEN: ADDITIONAL COSTS AND DAMAGES. . 29
18.1.Additional Costs And
Damages. .....29

ARTICLE NINETEEN: APPLICABLE LAW; DISPUTES. . . . 29
19.1.Governing Law.
.......29
19.2.Arbitration.
........29

ARTICLE TWENTY: ASSIGNMENT. . . . . . . 29
20.1.Assignment.. ......29

ARTICLE TWENTY-ONE: MISCELLANEOUS PROVISIONS. . . . 30
21.1. Headings. ........30
21.2. Counterparts.
........30
21.3. Enforceability Of
Provisions. ......30
21.4. Notices and
Communications. .....30

ARTICLE TWENTY-TWO: OPERATIONAL HANDBOOK . . . 31
22.1. Operational . . . . . . 31
Handbook.

ARTICLE TWENTY-THREE: COMPLETE AGREEMENT; INTERPRETATION 32
23.1.Prior Agreements
Superseded. .....32
23.2.Interpretation.
.......32

ANNEXES
---------------------------

Annex A Aircraft . . . . . . A-1/2
--------------------------- Specifications -- -- -- --- --- --- -----
-----------------
Annex B Flight Schedule. . . . . . B-1
--------------------------- ----------------- -- -- -- --- --- ---
Block Hour . . . B-2
Surcharge/Video -- -- --- ---
Charges.
-----------------
Annex C World Spare . . . . C-1
--------------------------- Parts Support. -- -- -- --- ---
-----------------
MAS Engineering . . . . C-2
Handling. -- -- -- --- -----
-----------------
Transit . . . C-3
Services/Other -- -- --- ---
Maintenance.
-----------------
Annex D Hotel . . . . . D
--------------------------- Accommodations. -- -- -- --- --- ---
-----------------
Annex E Positioning/Depositioning of World Personnel.
--------------------------- ----------------- -- --- ---
Annex F Notification Of Flight F
--------------------------- Cancellations, Flight Delays or ---
Diversions.
-----------------
Annex G MAS Cabin . . . . . G
--------------------------- Personnel. -- -- -- --- --- ---
-----------------
Anneh H Route Qualification of Commander, H
--------------------------- Age Limit And Experience. ---
-----------------

</TABLE>

- iii -
<PAGE>

AIRCRAFT SERVICES AGREEMENT

THIS AIRCRAFT SERVICES AGREEMENT (together with the Annexes attached
hereto, the "Agreement") dated September 26, 1994, is by and between WORLD
AIRWAYS, INC., a Delaware corporation having its principal place of business at
13873 Park Centre Road, Suite 490, Herndon, Virginia, 22071 United States of
America ("WORLD") and MALAYSIAN AIRLINE SYSTEM BERHAD, a corporation organised
and existing under the laws of Malaysia having its registered address at
Bangunan MAS, 33rd Floor, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia
("MAS").

WITNESSETH:
----------

WHEREAS, MAS wishes to obtain from WORLD and WORLD is prepared to provide to MAS
upon the terms and conditions set forth in this Agreement, two (2) McDonnell
Douglas MD-11 aircraft in a two (2) class configuration specified in this
Agreement in order to perform the scheduled passenger operations specified
herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, WORLD
and MAS agree as follows:

ARTICLE ONE: AIRCRAFT; PROVISION OF SERVICES
---------------------------------------------

1.1. Aircraft. WORLD shall provide the two aircraft ("Aircraft"), specified
--------
in Annex A, together with crews, for the performance of this Agreement.

1.2. Service/Schedule. WORLD shall operate the Aircraft for the purpose of
----------------
carrying passengers and belly cargo for MAS on the routes and in accordance with
the schedule set forth in Annex B.
<PAGE>

ARTICLE TWO: TERM.
------------------

2.1. Term. The term of this Agreement ("Term") shall commence on September
----
27, 1994, and shall expire on March 31, 1995, unless terminated earlier in
accordance with the provisions of this Agreement.

ARTICLE THREE: MINIMUM GUARANTEED AIRCRAFT UTILISATION.
-------------------------------------------------------

3.1. Minimum Monthly Block Hour Guarantee. MAS hereby guarantees to WORLD in
------------------------------------
connection with the performance of this Agreement a minimum of 320 block hours
of Aircraft utilisation for each month that this Agreement shall be in effect
("Minimum Monthly Block Hour Guarantee").

ARTICLE FOUR: CHARGES
----------------------

4.1. Block Hour Rate. In connection with the operation of the Aircraft
---------------
hereunder, MAS shall pay to WORLD the block hour rate of $4,700 USD for those
block hours flown up to 320 per month. Both MAS and WORLD will agree on a block
hour rate for those hours flown in excess of 320 per month.

4.2. Block Hour Definition. For the purposes of this Agreement, the term
---------------------
"Block Hour" shall be defined as every hour or portion thereof that the Aircraft
is operating calculated from the removal of the wheel chocks upon departure
until insertion of the wheel chocks upon arrival, as recorded in the Aircraft's
log book.

4.3. Block Hour Surcharge. To compensate WORLD for higher costs of
--------------------
operation, in the event that the hour/cycle ratio for the Aircraft while
operating the services to be provided under this Agreement shall fall below
4.0/1 for any
<PAGE>

month beginning Nov 1, 1994 until the end of the Term, MAS shall
pay to WORLD an additional charge as specified in Annex B-2.

4.4. Aircraft Positioning and Painting Costs. Both MAS and WORLD agree that
---------------------------------------
at the end of the Term of this Agreement should the Aircraft transition directly
from operating under this Agreement into service of the MAS 1995 Haj program
pursuant to the normal terms and conditions of the Long Term Aircraft Charter
Agreement the cost of aircraft positioning and painting will be recouped by
WORLD from MAS.

4.5 Other Payments. The parties understand MAS may be required to make
----------------
payments to its other aircraft lessors upon return of the two Airbus A300's
which WORLD's two MD-11's will replace. To facilitate MAS' ability to return the
two aircraft, (i) WORLD agrees to pay up to $1.6 million USD of any aircraft
rental-related costs assessed by MAS' current lessor associated with the return
of the aircraft, and (ii) WORLD and MAS agree to work jointly to negotiate the
return of the two aircraft on the most advantageous terms, for which purpose
WORLD agrees to make available to MAS technical and legal resources and MAS
agrees to keep WORLD fully informed of such negotiations and to include WORLD
representatives whenever possible. To the extent WORLD pays any of the
aforementioned $1.6 million, MAS agrees to pay to WORLD any economic benefits it
derives by virtue of the replacement of the two A300 aircraft with two of
WORLD's MD-11's.

FIVE: PAYMENT SCHEDULE
-----------------------

5.1. Payment Schedule. Upon execution of this Agreement, MAS shall pay to
----------------
WORLD the block hour charges for all flights scheduled to be operated between
September 27 and October 31, 1994. Thereafter, on the first day of each month
that this Agreement shall be in effect, MAS shall pay to WORLD
<PAGE>

an amount equal
to the Guaranteed Block Hours for the following month (calculated on a pro rata
basis) multiplied by the block hour rate.

Should the due date for the payment fall on a public holiday in Kuala
Lumpur, Los Angeles or New York, the payment shall be due on the next banking
day.

5.2. Payment Instructions. Any amounts due by MAS to WORLD hereunder shall
--------------------
be paid by MAS in U.S. Dollars ("USD") by wire transfer in immediately available
funds to the following account:

Nations Bank
Washington, D.C.
ABA No. 054001204

for credit to

Account No. 20-8671-2080
World Airways, Inc.

All payments to be made by MAS shall be made without deduction for, or on
account of, taxes or levies of any kind or nature whatsoever, unless MAS is
compelled by law to make payment after deduction of such taxes or levies, in
which event MAS shall pay to WORLD such additional amounts as may be necessary
to ensure that WORLD receives an amount in U.S. Dollars equal to the full amount
which it would have received had the payment not been subject to such taxes or
levies.

5.3. Invoices. WORLD shall invoice MAS within ten (10) calendar days after
--------
the end of each month during the Term hereof an amount equal to the block hours
actually flown by WORLD during the preceding month multiplied by the block hour
rate. If the amount of such invoice exceeds the payment made by MAS under the
payment schedule specified in Article 5.1., MAS shall pay the amount of such
excess to WORLD no later than twenty (20) calendar days after receipt of such
invoice.
<PAGE>

5.4. Final Accounting. Within sixty (60) calendar days after the end of the
----------------
Term or the earlier termination of this Agreement, WORLD shall provide MAS with
a final accounting of all amounts due under this Agreement; and within forty
five (45) calendar days of receipt of such final accounting (i) MAS shall pay to
WORLD all outstanding or unpaid amounts, or (ii) WORLD shall refund to MAS all
amounts received but not due to WORLD.

5.5. Late Payment. Any late payment by either party of any amount due under
------------
this Agreement shall bear interest from the date such payment is due at the rate
of ten percent (10%) per annum, and the party to whom such amount is due shall
be entitled to recover judgement for the total amount due, including such
interest, and any costs of collection incurred in connection therewith,
including reasonable legal expenses and attorneys' fees.

5.6. No Counterclaims, Set-offs, etc. MAS's obligation to pay all sums due
--------------------------------
hereunder shall be absolute and unconditional and shall not be subject to any
right of set-off, counterclaim, defense, abatement, suspension, deferment,
diminution, reduction, recoupment or other right which MAS may have against
WORLD or any other person for any reason whatsoever.

ARTICLE SIX: RESPONSIBILITIES OF WORLD AND MAS.
-----------------------------------------------

6.1. Responsibilities Of WORLD. WORLD at its own cost and expense shall
-------------------------
provide:

(a) The Aircraft as described in Annex A together with three flight deck
crew members for each flight;

(b) Aircraft conversion to the seat configuration desired by MAS
<PAGE>

(d) Positioning of the Aircraft to Kuala Lumpur except as provided in
Article 4.4

(e) All salaries and per diem allowances for flight crew members;

(f) Maintenance of the Aircraft in accordance with WORLD's FAA-approved
maintenance program, except as specified in Article 6.2.;

(g) Insurance in accordance with Article Thirteen;

(h) Qualified operational staff to handle WORLD crew administration
matters;

(i) Rotable spare parts support as specified in Annex C1;

(j) Nine (9) sets of catering equipment including carts, trays and other
galley equipment unique to WORLD'S aircraft;

(k) Inflight video programming in accordance with international airline
standards at the rate specified in Annex B-2.

6.2. Responsibilities Of MAS. MAS at its own cost and expense shall provide:
-----------------------

(a) Minimum nine (9) Cabin Attendants for each flight segment trained to
WORLD'S and FAR Part 121 standards in accordance with Annex G, including their
salaries and per diem allowances;
<PAGE>

(b) Aircraft ground handling at all stations excluding aircraft
certification;

(c) Passenger processing, baggage handling, cargo handling and security
screening at all stations in accordance with FAA airplane operator, indirect
aircarrier and airport security requirements and in a manner acceptable to
WORLD;

(d) Landing fees and airport security fees at all stations;

(e) Navigation fees over the routing specified in Annex B and for any and
all ad hoc operations requested by MAS;

(f) Aircraft parking fees at all stations;

(g) Aircraft fuel, oil (Exxon 2380), de-icing, lubricating and hydraulic
fluid (Chevron Hyjet IV or 500-B4/LD4);

(h) Aircraft transit maintenance and other aircraft maintenance as
specified in Annex C-3 at all stations along the routing specified in Annex B
and for any and all ad hoc operations requested by MAS;

(i) Hotel accommodations for WORLD flight deck crew members, including
ground transportation between hotel and airport;

(j) Commissary supplies and catering for all passengers and WORLD flight
deck crew members and other WORLD personnel travelling onboard in support of
WORLD's obligations under this Agreement

(k) FOC "C" class firm airline transportation on the air services of MAS
for WORLD's aircrew, positioning staff and other executive personnel on duty
travel directly related to performing services under this Agreement;
<PAGE>

(l) All transportation of spare engines and spare parts for the Aircraft,
on a positive space basis, provided however, that WORLD will use reasonable
-------- -------
efforts to provide MAS with prior notice of WORLD's requirements;

(m) Use of MAS's facilities at all scheduled stations specified in Annex B
by WORLD personnel, with access to MAS telephone, SITA and telex communications
equipment;

(n) Interior cleaning of the Aircraft at all stations

(o) Insurance in accordance with Article Thirteen;

(p) Identification of all agents and subcontractors retained by MAS to
perform its responsibilities hereunder.

6.3. Payment Responsibilities Of MAS. MAS shall arrange for all invoices and
-------------------------------
bills relating to the responsibilities assumed by MAS as set forth in Article
6.2 to be sent to and paid directly by MAS, unless WORLD and MAS agree otherwise
in writing.

6.4 Reciprocal Obligations: All other costs and expenses arising out of the
-----------------------
operation of the Aircraft in accordance with this Agreement and not expressly
set forth in this Agreement shall be mutually agreed upon. In the event either
party does not perform its obligations hereunder, the other party shall have the
right but not the obligation to perform any of that party's responsibilities at
the other's cost. Upon demand the non-performing party shall reimburse the
other party for any amount it has paid in connection with the performance of
responsibilities hereunder.
<PAGE>

ARTICLE SEVEN: OPERATION OF THE AIRCRAFT
-----------------------------------------

7.1. Control Of The Aircraft. WORLD at all times shall have operational
---- -----------------------
control over all flights performed under this Agreement and shall be solely
responsible for compliance with all applicable United States Federal Aviation
Administration ("FAA") regulations in connection with the flight operations
contemplated under this Agreement. Consistent with this provision, WORLD shall
have the sole authority to determine whether a particular flight may be safely
operated, to assign crew members for particular flights, to dispatch and release
flights, to direct crew members and to initiate and terminate flights. The
Captain of the Aircraft shall be in command of the Aircraft and shall have
complete discretion concerning the operation of the Aircraft and the initiation
and termination of any flight, and MAS undertakes to accept all decisions of the
Captain. The Captain shall have full authority and control in the operation of
the Aircraft and shall have full authority and control over other crew members
and their duties during flight time.

7.2. Right Of Substitution. WORLD shall have the right at any time to
---------------------
replace the Aircraft with another aircraft having a payload capacity equal to or
greater than the Aircraft's. WORLD shall promptly inform MAS regarding any such
substitutions.

7.3. Lawful Use. WORLD shall not be required to operate the Aircraft
----------
contrary to any applicable law or regulation of any government or governmental
agency having jurisdiction over the Aircraft. Nor shall WORLD be required to
operate the Aircraft into or over Afghanistan, Angola, Chad, El Salvador,
Ethiopia, Iraq, Kuwait, Laos, Liberia, Libya, Nicaragua, Somalia, Sudan, Zaire,
Haiti, those states that are or were part of Yugoslavia, former republics of
USSR other than Russia, any country subject to United Nations Sanctions, or any
other territory or jurisdiction or in any manner or fashion that would
jeopardise WORLD's insurance coverage for the Aircraft.
<PAGE>

7.4. Regulatory Compliance. MAS shall ensure that carriage of all cargo
---------------------
hereunder shall be in accordance with FAA and IATA rules as applicable and any
other applicable government regulations.

7.5. Cargo Restrictions. The Aircraft shall not be used for the carriage of
------------------
weapons or munitions of war. Livestock shall be carried only in accordance with
specifications and procedures mutually acceptable to the parties hereto.

7.6. Aircraft Livery. WORLD agrees to paint the Aircraft into MAS livery.
---------------
MAS rights under this Article 7.6 are subject to the regulations of the FAA
regarding aircraft markings on U.S. registered aircraft.

7.7. Return Condition Of Aircraft. At the end of the Term hereof or upon the
----------------------------
earlier termination of this Agreement, the Aircraft dedicated to the services
hereunder shall be returned into WORLD's operations in as good condition as upon
the commencement of the services, normal wear and tear excepted.

ARTICLE EIGHT: DOCUMENTATION.
------------------------------

8.1. Operating Permits. Except where governmental regulations require action
-----------------
by WORLD, MAS shall obtain and maintain all necessary governmental permits,
traffic rights, operating authorities and franchises, and any other
authorisations required in connection with the performance of this Agreement.
At MAS's cost and expense, WORLD shall assist MAS in obtaining such
authorisations. Failure of MAS to obtain such permits, provided such failure is
due to wilful neglect, will not be cause to release MAS from its other
obligations under the Agreement.

8.2.(a) Passenger Documentation. MAS shall be responsible for ensuring that
------------------------
the carriage of any and all passengers pursuant to this Agreement complies with
all applicable immigration, health, police, customs and other laws, rules,
<PAGE>

regulations and requirements of each country from, to or through which each
individual flight hereunder is operated. MAS shall notify WORLD of
irregularities in the travel documentation of any passenger. WORLD reserves the
right to refuse carriage to any passenger whose documents are not completed or
who has not complied with applicable laws, rules, regulations or requirements.
WORLD shall not be liable to MAS or any passenger for any loss, fee, charge,
expense or other consequence due to a failure to comply with requirements of
this paragraph.

8.2.(b) Cargo Documentation. MAS shall contract as principal and as carrier
-------------------
for all cargo to be carried on the Aircraft and shall not under any
circumstances have the authority to enter into any contract on behalf of, or
binding upon, WORLD. MAS's standard conditions of carriage shall govern the
carriage of cargo on the Aircraft and MAS's airwaybills or other documents of
carriage shall be used for cargo to be carried on the Aircraft. MAS shall be
responsible for ensuring that the carriage of cargo pursuant to this Agreement
complies with all applicable immigration, health, police, customs and other
laws, regulations and requirements of each country from, to or through which
each individual flight is operated. All airwaybills shall have attached to them
all documents necessary to comply with such laws, regulations and requirements.

8.3. MAS Notification To WORLD. MAS will endeavour to notify WORLD'S
-------------------------
Dispatch of the estimated payload for the Aircraft at least four (4) hours prior
to the departure of each flight. MAS shall furnish the number of passengers,
passenger and cargo manifests, any other documentation and all transportation
documents necessary for each flight and shall deliver the same to the Captain of
the Aircraft in sufficient time to avoid delay to the scheduled departure of the
Aircraft but in no case less than thirty (30) minutes prior to departure.

8.4. Work Permits. At WORLD's request, MAS shall assist work permit
------------
applications required by any governmental authority on behalf of any WORLD
personnel performing services in connection with this Agreement. MAS shall
<PAGE>

provide such other assistance as WORLD may reasonably request in connection with
such work permit applications.

ARTICLE NINE: SCHEDULE CHANGES; FLIGHT DISRUPTIONS.
---------------------------------------------------

9.1. Schedule Changes. MAS may request changes to the schedule specified in
----------------
Annex B provided, however, that (i) such changes to the schedule shall not
-------- -------
reduce the Minimum Monthly Block Hour Guarantee; (ii) arrival and departure
times are available at all airports on the requested routing so as to permit
WORLD to perform the services to be provided hereunder and to fulfil its other
contractual commitments; and (iii) WORLD shall be reimbursed by MAS for all
additional costs resulting from such schedule changes including without
limitation, any additional crew costs or Aircraft maintenance costs. Any
request for a schedule change shall be issued by MAS's operations control
centre. Receipt of such request shall be confirmed immediately by WORLD's
dispatch centre. WORLD reserves the right (which right shall not be
unreasonably exercised), to reject any schedule change request by MAS.

9.2. Flight Disruptions.
------------------

(A) MAS shall bear all costs (except consequential damages of WORLD)
arising out of a flight delay, flight cancellation, or diversion of the Aircraft
which is caused by:

(i) MAS's request;

(ii) Weather conditions or air traffic control;

(iii) Any work stoppage by MAS's employees, agents and servants; or
<PAGE>

(iv) Any act or omission of MAS's employees, agents and servants that
affects the operation of the Aircraft.

Flight delays, flight cancellations or diversions of the Aircraft caused by
any of the reasons specified in this Article 9.2(A) shall not reduce the Minimum
Monthly Block Hour Guarantee.

(B) WORLD shall bear all costs (except consequential damages of MAS)
arising out of a flight delay, flight cancellation or diversion of the Aircraft
which is caused by:

(i) A mechanical failure on the Aircraft, except as provided under Article
9.2(A)(iv);

(ii) Failure of WORLD's flight deck crew members to report for duty; or

(iii) Any work stoppage by WORLD's employees, agents and servants.

(C) In the event of a flight delay, flight cancellation or diversion of
the Aircraft under Article 9.2(B), WORLD shall exercise reasonable efforts to
substitute another aircraft having a payload capacity equal to or greater than
the Aircraft's. In the event of such substitution, reference to "the Aircraft"
in this Agreement shall be construed as reference to the substituted aircraft.
In lieu of substituting its own aircraft, WORLD shall have the right to provide
MAS with substitute service from another air carrier, provided that the aircraft
operated by the substitute air carrier has a payload capacity equal to or
greater than the Aircraft's.

(D) Neither WORLD nor MAS shall be responsible for flight delays, flight
cancellations or diversions of the Aircraft that are due to an Act of
<PAGE>

God, civil
war, riot, insurrection, civil disturbance, fire, flood, explosion, earthquake,
hurricane, typhoon, epidemic or quarantine restriction, work stoppage (other
than as specified in this Article 9.2(A) or (B)) or any other event beyond
either party's control. In the event of such flight delay, flight cancellation
or diversion, MAS shall pay to WORLD a reduced block hour rate of USD $2350 per
block hour for each scheduled block hour not flown by WORLD during the period
that the Aircraft is unable to operate.

ARTICLE TEN: USE OF AIRCRAFT BY WORLD.
--------------------------------------

10.1. Other Operations. The Aircraft may be used by WORLD to perform other
----------------
contractual commitments and in connection with its own operations when not
performing services for MAS hereunder. During such use of the Aircraft by WORLD
any services (including, but not limited to, fuel) provided to WORLD by MAS or
its suppliers shall be reimbursed to MAS by WORLD at MAS's cost.

10.2. Crew Training; Duty Travel. Provided that such use of the Aircraft
--------------------------
does not interfere with the operation of the Aircraft on MAS's behalf, WORLD may
use the Aircraft while performing services for MAS hereunder for (i) flight crew
training, and (ii) transportation of flight crews or other WORLD personnel for
purposes of positioning or training.

ARTICLE ELEVEN: EMPLOYEES.
--------------------------

11.1. Employees; Workmen's Compensation Insurance. It is understood and
-------------------------------------------
agreed that the employees of the respective parties hereto shall continue as
employees of that party and shall not be deemed employees of the other party.
Each party shall cover its employees with such workmen's compensation insurance,
or its
<PAGE>

equivalent, as shall be required by law, and upon request shall provide
the other party with evidence of such coverage.

ARTICLE TWELVE: LIENS AND TAXES.
--------------------------------

12.1. Liens. MAS shall have no right, title or interest in the Aircraft.
-----
Neither MAS nor its employees, agents or servants shall create, incur, consent
to, or suffer to exist any lien, attachment, mortgage or other encumbrance upon
or against the Aircraft other than Liens to which WORLD gives its written
consent ("Liens"). MAS shall indemnify, defend and hold WORLD harmless from and
against any and all Liens created by MAS either by act or omission. If at any
time such Liens shall exist or be levied upon the Aircraft, MAS shall
immediately cause the same to be removed or discharged. In the event MAS shall
fail to so remove or discharge any Liens, WORLD may do so, and MAS shall pay to
WORLD the amount paid by WORLD in connection with removing or discharging such
Lien, including reasonable legal expenses and attorneys' fees, together with
interest computed at the rate of ten percent (10%) per annum or the maximum rate
allowable by law, whichever is lower, from the date payment is made by WORLD
until WORLD is paid by MAS.

12.2. Taxes. MAS shall pay or cause to be paid, and shall hold WORLD
-----
harmless from and against any and all taxes, levies, imposts, customs, duties,
charges, currency surcharges, fees, assessments, deductions, or withholdings of
any kind or nature (collectively, together with interest and penalties thereon,
"Taxes") levied, assessed or imposed on WORLD or its officers, directors,
agents, servants and employees ("Tax Indemnities") or against the Aircraft by
any government or agency in connection with the performance of this Agreement.
MAS's obligations hereunder shall not include Taxes imposed by the United States
of America or any state of local political subdivision thereof that are based
on, or measured by, the net income of any of the Tax Indemnities. MAS at its
own expense may contest such Taxes in proceedings brought in good
<PAGE>

faith where a
reasonable basis exists for such challenge but only if such proceedings will not
result in a forfeiture of the Aircraft. In the event MAS shall fail to pay such
Taxes, WORLD may do so, and MAS shall pay to WORLD the amount paid by WORLD in
connection with such Taxes, including reasonable legal expenses and attorneys'
fees, together with interest computed at the rate of ten percent (10%) per annum
or the maximum rate allowable by law, whichever is lower, from the date payment
is made by WORLD until WORLD is paid by MAS.

ARTICLE THIRTEEN: INSURANCE
----------------------------

13.1. WORLD Aircraft Hull Insurance. WORLD shall procure and maintain hull
-----------------------------
insurance in respect of the Aircraft and the operation thereof under this
Agreement against all risks including war risks and hijacking and kindred
perils. WORLD shall furnish MAS with certificates containing details of such
insurance not later than fourteen (14) calendar days prior to commencement of
the services to be performed by WORLD under this Agreement. Such hull insurance
shall provide for a waiver of underwriters' rights of recovery (waiver of
subrogation) but only to the extent that WORLD has waived its rights of recovery
under this Agreement against MAS, its officers, directors, agents, servants and
employees.

13.2. WORLD Third Party Aviation Legal Liability Insurance. WORLD shall
----------------------------------------------------
procure and maintain Aircraft Third Party Aviation Legal Liability insurance
against all risks, including war risks, hijacking and kindred perils in respect
of all operations under this Agreement in an amount not less than USD SIX
HUNDRED MILLION ($600,000,000) for any one occurrence and shall furnish MAS with
certificates containing details of such insurance not later than fourteen (14)
calendar days prior to commencement of the services to be performed by WORLD
under this Agreement. Such insurance shall include the following provisions:
<PAGE>

(a) MAS, its officers, directors, agents, servants and employees shall be
named as additional insureds (the "MAS Additional Insureds");

(b) acceptance by the insurers of the contractual obligations of WORLD to
the MAS Additional Insureds as set forth in this Agreement to the extent of
coverage afforded under the policies;

(c) that such insurance shall be primary without any right of
contribution from any insurance carried by the MAS Additional Insureds;

(d) a standard clause as to cross liability or severability of interests
among parties appearing as MAS Additional Insureds;

(e) the geographic limits, if any, shall be worldwide but in the case of
war risk coverage territory shall be subject to such excluded territories as is
usual and customary in the airline industry;

(f) that not less than thirty (30) calendar days written notice or such
shorter notice period as shall be available under the war, hijacking and kindred
perils insurance shall be given to the MAS of cancellation by insurers or
adverse material alteration or reduction in the limits of coverage under the
policies;

(g) that the interest of the MAS Additional Insureds under such policies
is insured regardless of any breach by WORLD of any warranties.

13.3. MAS Liability Insurance. MAS shall procure and maintain at its expense
-----------------------
public passenger, baggage, cargo, mail, aviation premises, public liability, and
legal liability insurances (including declared values) against all risks,
including war risks, hijacking and kindred perils in respect of all operations
under this Agreement in amounts acceptable to WORLD being in any case not less
than
<PAGE>

USD SIX HUNDRED MILLION ($600,000,000) (combined single limit) for any one
occurrence and shall furnish WORLD with certificates containing details of such
insurances not later than fourteen (14) calendar days before the commencement of
the lease term. Such insurances shall provide for a waiver or underwriters'
rights of recovery (waiver of subrogation) but only to the extent that MAS has
waived its rights of recovery under this Agreement against WORLD, or ILFC, their
officers, directors, agents, servants and employees. Such insurance shall
include the following provisions:

(a) WORLD, its officers, directors, agents, servants and employees shall
be named as additional insureds ("WORLD Additional Insureds");

(b) Lessor: ILFC, its officers, directors, agents, successors, assigns,
employees shall by named as additional insureds;

(c) acceptance by the insurers of the contractual obligations of MAS to the
WORLD Additional Insureds, directors, agents, servants and employees as set
forth in this Agreement to the extent of coverage afforded under the policies;

(d) that such insurance shall be primary without any right of contribution
from any insurance carried by the WORLD Additional Insureds;

(e) a standard clause as to cross liability or severability of interests
among parties appearing as WORLD Additional Insureds;

(f) the geographic limits, if any, shall include at the minimum all
territories over which the Aircraft will be operated hereunder.

cancellation by insurers or adverse material alteration or reduction in the
insured value or reduction in the value of perils to be insured against;

(h) that the interest of the WORLD Additional Insureds in such policies is
insured regardless of any breach by MAS of any warranties.

13.4. Loss of Insurance. In the event either party should for any reason
-----------------
fail to renew the insurances required to be effect by the party hereunder at
least thirty (30) calendar days prior to the expiration thereof or fail to keep
any such policy in full force and effect, the other party shall have the option
to pay the premiums on said policy or contract of insurance or to take out such
insurance, with the amount of any such premiums to be immediately due and
payable to the other party, provided, however, that no exercise by the other
-------- -------
party of said option shall in any way affect its rights and remedies hereunder.

ARTICLE FOURTEEN: INDEMNIFICATION.
----------------------------------

14.1. Indemnification By WORLD. WORLD hereby indemnifies and agrees to hold
------------------------
harmless MAS, its officers, directors, agents, servants and employees from and
against any and all liabilities, claims, demands, suits, judgments, damages,
losses, costs and expenses (including reasonable legal expenses and attorneys'
fees) for or on account of or in any way connected with injury to or death of
any persons (but excluding passengers) whomsoever or loss of or damage to any
property (except baggage, cargo, mail and MAS property) arising out of (i) the
use or the operation of the Aircraft under this Agreement or in any way
connected with this Agreement including but not limited to the Aircraft and its
related equipment or (ii) the performance or non-performance by WORLD of its
responsibilities under this Agreement, unless such loss or damage arises from
the gross negligence or wilful misconduct of MAS, its officers, directors,
<PAGE>

agents, servants or employees or unless MAS has indemnified WORLD in respect of
such loss, damage, death or injury pursuant to Article 14.2 or 14.3.

14.2. Indemnification By MAS.
----------------------

(A) MAS hereby indemnifies and agrees to hold harmless WORLD and ILFC, its
officers, directors, agents, servants and employees from and against all
liabilities, claims, demands, suits, judgements, damages, losses, costs and
expenses (including reasonable legal expenses and attorneys' fees) connected
therewith or incident thereto arising out of loss of or damage to any baggage,
cargo, mail or MAS property or delay in delivery of any baggage, cargo or mail
or death of or injury to any passenger caused by or arising out of or in any way
connected with (i) this Agreement or the use or the operation of the Aircraft
under this Agreement or (ii) the performance or non-performance of MAS's
responsibilities under this Agreement, unless such loss or damage arises from
the gross negligence or wilful misconduct of WORLD, its officers, directors,
agents, servants or employees.

(B) MAS hereby indemnifies and agrees to hold harmless, and shall cause its
agents and subcontractors to indemnify and hold harmless WORLD, its officers,
directors, agents, servants and employees from and against all liabilities,
claims, demands, suits, judgements, damages, losses, costs and expenses
(including reasonable legal expenses and attorneys' fees) connected therewith or
incident thereto arising out of loss of or damage to the Aircraft in any way
connected to the performance or non-performance of MAS's responsibilities under
this Agreement, unless such loss or damage arises from the gross negligence or
wilful misconduct of WORLD, its officers, directors, agents, servants or
employees.
<PAGE>

(C) MAS shall make every effort to ensure that the Aircraft is not used by
any party for unlawful purposes including without limitation smuggling of
contraband articles. MAS hereby indemnifies and agrees to hold harmless WORLD,
its officers, directors, agents, servants and employees from and against all
liabilities, fines, penalties, assessments, charges, damages, losses, costs and
expenses (including reasonable legal expenses and attorneys' fees) arising out
of or in any way connected to the use of the Aircraft for unlawful purposes
unless WORLD, its officers, directors, agents, servants or employees perpetrate
such unlawful use. MAS's liability to WORLD hereunder specifically extends to
any loss of use of the Aircraft.

14.3. Employee Claims. Notwithstanding anything to the contrary set forth in
---------------
this Article Fourteen, each party hereby indemnifies and agrees to hold harmless
the other party, its officers, directors, agents, servants and employees from
and against all liabilities, claims, demands, suits, judgements, damages,
losses, costs and expenses (including reasonable legal expenses and attorneys'
fees) connected therewith or incidental thereto for death of or injury to any
officer, director, agent, servant or employee of each party (provided such death
or injury arises out of and in the course of such individual's employment by
such party) caused by or arising out of or in any way connected with the use or
the operation of the Aircraft under this Agreement, unless such death or injury
arises from the gross negligence or wilful misconduct of the other party, its
officers, directors, agents, servants or employees.

14.4. No Consequential Damages. Except as otherwise specifically provided by
------------------------
this Agreement, neither party shall be liable for consequential damages under
this Agreement.

14.5. Mutual Assistance. Each party agrees to give to the other party all
-----------------
assistance reasonably requested, and to put at its disposal all pertinent
records, to
<PAGE>

facilitate the prosecution or defense of any claims, suits or
investigations arising out of this Article Fourteen.

ARTICLE FIFTEEN - EARLY TERMINATION
-----------------------------------

15.1. Grounds For Early Termination. Except as provided under Article 16.2
-----------------------------
and Article 17.2, neither party shall have the right to terminate this Agreement
prior to the completion of the Term except that WORLD may so terminate under any
of the following circumstances:

(a) Loss of Aircraft. In the event of loss or destruction of the Aircraft,
----------------
or damage to the Aircraft rendering repair impractical or uneconomic, this
Agreement shall be deemed terminated as of the date of such loss, destruction or
damage, provided, however, that if WORLD notifies MAS within fifteen (15)
-------- -------
calendar days after the date of such loss, destruction or damage that it will
continue to make available to MAS an aircraft having a payload capacity equal to
or greater than the Aircraft's, then this Agreement shall not be deemed
terminated. In the event of any loss, destruction or damage to the Aircraft,
MAS shall fully cooperate with WORLD to facilitate the prosecution or defense of
any claims, suits or investigations. MAS shall not release publicly any
information regarding such loss, destruction or damage without first consulting
with WORLD.

(b) Airlift Emergency. In the event an airlift emergency has been
-----------------
declared by the President of the United States or the Secretary of Defense or
his designee or if the Civil Reserve Air Fleet has been activated by order of
the Secretary of Defense in accordance with WORLD's Military Airlift Command
contract, or if the Aircraft is requisitioned by the United States in connection
with a national emergency, WORLD may terminate this Agreement.
<PAGE>

(c) AD Compliance Costs. In the event the costs of bringing the Aircraft
-------------------
into compliance with any (i) instruction or airworthiness directive of the FAA,
or (ii) mandatory manufacturer service bulletin, falling due during the Term, is
estimated by WORLD to exceed USD FIVE HUNDRED THOUSAND ($500,000) per Aircraft,
WORLD may terminate this Agreement. However, WORLD will use its best effort to
secure for MAS a substitute aircraft having a payload capacity equal to or
greater than the Aircraft's.

(d) Merger/Consolidation. In the event MAS is merged with or consolidated
--------------------
into any other corporation or entity, or otherwise fails to maintain its
corporate existence, WORLD may terminate this Agreement.

Upon termination of this Agreement under any of the above circumstances,
MAS shall cease to have any rights or remedies in respect of the Aircraft
hereunder, but all such rights and remedies shall be deemed thenceforth to have
been waived and surrendered by MAS, and no payments theretofore made by MAS
hereunder shall give to MAS any cause or right of action at law or in equity in
respect of the Aircraft or the use or operation thereof. No such termination of
this Agreement by WORLD shall be a bar to the recovery by WORLD from MAS of any
amounts owed by MAS under this Agreement, provided however that such termination
has not resulted from WORLD's wilful neglect, and MAS shall be and remain liable
for the same until such amounts shall have been paid in full. MAS shall also
reimburse WORLD for all costs, including reasonable legal expenses and
attorneys' fees, incurred in connection with (i) the return of the Aircraft to
WORLD in the condition specified in Article 7.7 and (ii) the collection of any
monies owed or thereafter owing to WORLD under this Agreement.
<PAGE>

Provided however in the event that WORLD terminates this Agreement under
circumstances (a) or (c) of the above, WORLD shall refund to MAS all monies paid
in advance prior to such termination including without limitation the advance
rental, in full or pro-rate amount for services which WORLD did not perform.
WORLD's above obligation shall arise only if such event leading to the
termination is caused by the wilful misconduct or negligence of WORLD, its
employees, servants or agents. In the event that the cause is beyond either
party's control, it is agreed that the amount to be refunded shall be on 50/50
basis of the full amount or on the pro-rate amount as the case may be.

15.2. Return Of Equipment. Under any termination provided for in this
-------------------
Article Fifteen, all equipment owned or leased by one party hereto and in the
possession of the other party shall be returned to the rightful owner in as good
condition as when received, normal wear and tear excepted.

ARTICLE SIXTEEN: DEFAULTS BY MAS
---------------------------------

16.1. Events Of Default By MAS. The following events shall constitute Events
------------------------
of Default:

(a) Default by MAS in the making of any payments to WORLD when due under
this Agreement which default shall continue for a period of five (5) working
days or more; or

(b) Cancellation by MAS of all or any substantial part of the schedule set
forth in Annex B; or

(c) Expiration, withdrawal, revocation or termination of any governmental
permits, traffic rights, operating authorities or franchises, or any other
authorisations required of MAS; or
<PAGE>

(d) Default by MAS at any time in the procurement or maintenance of any
insurance coverage prescribed herein; or

(e) Default by MAS in the observance or performance of any of the material
covenants, conditions, agreements or warranties on the part of MAS contained in
this Agreement, which default shall continue for a period of fourteen (14)
calendar days after written notice from WORLD to MAS specifying the default and
demanding that the same be remedied; or

(f) If MAS shall file a voluntary petition of bankruptcy or shall admit in
writing its insolvency or bankruptcy, or shall make a general assignment for the
benefit of creditors, or shall consent to the assignment to a receiver, trustee
or liquidator of MAS of all or substantially all of its property, or shall file
a petition or answer seeking reorganisation in a proceeding under any bankruptcy
or insolvency laws as now or hereinafter in effect, or an involuntary petition
in bankruptcy or reorganisation shall have been filed against MAS and shall not
have been vacated or discharged within thirty (30) calendar days from the date
of the filing thereof, or if any order, judgement or decree shall be entered by
any court of competent jurisdiction appointing a receiver, trustee or liquidator
of MAS or of any substantial part of its property and such order, decree or
judgement shall remain in force and shall not have been dismissed or vacated for
a period of thirty (30) calendar days after the date of entry thereof; or

(g) All or substantially all of the property or assets of MAS shall be
condemned, confiscated, or otherwise appropriated by any governmental authority
and shall be detained for a period of thirty (30) consecutive calendar days.
<PAGE>

16.2. Remedies Of WORLD. Upon the occurrence of any of the foregoing Events
-----------------
of Default during the Term of this Agreement, WORLD may within ten (10) calendar
days after such Event of Default has occurred, terminate this Agreement by
serving written notice upon MAS to that effect, and this Agreement shall
thereupon terminate immediately. Upon service of such notice, WORLD may return
the Aircraft to such location as WORLD may choose, free and clear of its
obligations hereunder. Upon service of such notice, MAS shall cease to have any
rights or remedies in respect of the Aircraft hereunder, but all such rights and
remedies shall be deemed thenceforth to have been waived and surrendered by MAS,
and no payments theretofore made by MAS hereunder shall give to MAS any cause or
right of action at law or in equity in respect of the Aircraft or the use or
operation thereof. No such termination of this Agreement by WORLD shall be a
bar to the recovery by WORLD from MAS of any amounts owed by MAS under this
Agreement, and MAS shall be and remain liable for the same until such amounts
shall have been paid in full. MAS shall also reimburse WORLD for all costs,
including reasonable legal expenses and attorneys' fees, incurred in connection
with (i) the return of the Aircraft to such location as WORLD may choose, (ii)
the return of the Aircraft to WORLD in the condition specified in Article 7.7
and (iii) the collection of any monies owed or thereafter owing to WORLD under
this Agreement.

16.3. Interest On Monies Owed. With regard to sums which may become due
-----------------------
and payable under this Article Sixteen, but are not paid when due, such sums
shall bear interest at the rate of ten percent (10%) per annum or the maximum
rate allowable by law, whichever is lower, on any portion thereof overdue; and
WORLD shall be entitled to recover judgement for the total amount due from MAS,
including such interest, and any costs of collection incurred by WORLD,
including reasonable legal expenses and attorneys' fees.
<PAGE>

ARTICLE SEVENTEEN: DEFAULTS BY WORLD.
------------------------------------

17.1. Events Of Default By WORLD. The following events shall constitute
--------------------------
Events of Default by WORLD:

(a) Default by WORLD in the making of any payments to MAS when due under
this Agreement which default shall continue for a period of five (5) working
days or more; or

(b) Default by WORLD at any time in the procurement or maintenance of any
insurance coverage prescribed herein; or

(c) Default by WORLD in the observance or performance of any of the
material covenants, conditions, agreements or warranties on the part of WORLD
contained in this Agreement, which default shall continue for a period of
fourteen (14) calendar days after written notice from MAS to WORLD specifying
the default and demanding that the same be remedied; or

(d) If WORLD shall file a voluntary petition of bankruptcy or shall admit
in writing its insolvency or bankruptcy, or shall make a general assignment for
the benefit of creditors, or shall consent to the assignment to a receiver,
trustee or liquidator of WORLD of all or substantially all of its property, or
shall file a petition or answer seeking reorganisation in a proceeding under any
bankruptcy or insolvency laws as now or hereinafter in effect, or an involuntary
petition in bankruptcy or reorganisation shall have been filed against WORLD and
shall not have been vacated or discharged within thirty (30) calendar days from
the date of the filing thereof; or if an order, judgement or decree shall be
entered by any court of competent jurisdiction appointing a receiver, trustee,
or liquidator of WORLD or of any substantial part of its property and such
order, decree or judgement shall remain in force and
<PAGE>

shall not have been dismissed or vacated for a period of thirty (30) calendar
days after the date of entry thereof; or

except in cases involving a commitment of the Aircraft, or any of WORLD's
------
aircraft, in an airlift emergency as determined by the President of the United
States or the Secretary of Defense or his designee.

17.2. Remedies Of MAS. Upon the occurrence of any of the foregoing Events of
---------------
Default during the Term of this Agreement, MAS may, at its election within ten
(10) calendar days thereafter, terminate this Agreement by serving written
notice upon WORLD to that effect and this Agreement shall thereupon terminate
immediately. Upon service of such notice, WORLD shall refund to MAS all monies
paid in advance prior to such termination including without limitation the
advance rental in full or pro-rate amount. No such termination of this
Agreement by MAS shall be a bar to the recovery by MAS from WORLD of any amounts
owed by WORLD under this Agreement, and WORLD shall be and remain liable for the
same until such amounts shall have been paid in full. WORLD shall also
reimburse MAS for all costs, including reasonable legal expenses and attorney's
fees incurred in connection with the collection of any monies owed or there
after owing to MAS under this Agreement

17.3. Interest On Monies Owed. With regard to sums which may become due
-----------------------
and payable under this Article Seventeen, but are not paid when due, such sums
shall bear interest at the rate of ten percent (10%) per annum or the maximum
rate allowable by law, whichever is lower, on any portion thereof overdue; and
MAS shall be entitled to recover judgement for the total amount due from WORLD,
including such interest, and any costs of collection incurred by MAS, including
reasonable legal expenses and attorneys' fees.
<PAGE>

ARTICLE EIGHTEEN: ADDITIONAL COSTS AND DAMAGES.
------------------------------------------------

18.1. Either Party shall be liable to the other Party for the payment of any
-----
other amounts or costs provided for in Articles 16.2. and 16.3. or Articles
17.2. and 17.3.

ARTICLE NINETEEN: APPLICABLE LAW; DISPUTES.
--------------------------------------------

19.1. Governing Law. This lease shall in all respects be governed by and
----- -------------
construed in accordance with the Law of England including all matters of
construction validity and performance.

19.2. Arbitration.
-----------

a. The Parties shall first use their best endeavours to resolve, through
mutual consultation or a meeting of the Chief Executive Officers of the parties
hereof without involving any third party or parties, any disputes which may
arise under, out of or in connection with or in relation to this Agreement.

b. All disputes arising in connection with the present contract shall be
finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules.

ARTICLE TWENTY: ASSIGNMENT.
---------------------------

20.1. Assignment. Neither party shall assign this Agreement, or any rights
----------
or obligations hereunder, in whole or part, to any other person without the
prior written consent of the other party, except that (i) WORLD or MAS may
assign this Agreement or any of its rights and obligations hereunder to any
wholly
<PAGE>

owned subsidiary or other affiliate of World Corp, Inc. or MAS as the
case may be, or its or their successors and (ii) WORLD may freely assign its
interest in any monies due or to become due from MAS hereunder. Any assignment
in contravention of the terms hereof shall be null and void.

ARTICLE TWENTY-ONE: MISCELLANEOUS PROVISIONS.
---------------------------------------------

21.1. Headings. The headings of the Articles and Sections hereto are
--------
inserted for convenience only and shall not govern the meaning or construction
of any of the provisions hereof.

21.2. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each such counterpart constituting an original hereof.

21.3. Enforceability Of Provisions. No delay or omission in the exercise
-----------------------------
of any power or remedy herein provided or otherwise available to WORLD or MAS
shall impair or affect such party's right thereafter to exercise the same. Any
extension of time for payment hereunder or other waiver or indulgence granted to
MAS in any particular instance shall not alter or affect WORLD's rights or the
obligations of MAS hereunder in any other or future instance. WORLD's
acceptance of any payment after it shall have become due hereunder shall not be
deemed to alter or affect the obligations of MAS or WORLD's rights hereunder
with respect to any subsequent payment.

21.4. Notices and Communications. All notices and communications to be
--------------------------
given pursuant to this Agreement shall be in writing and shall be delivered to
or served upon the parties in person or by telegram, telex, telefax, SITA or by
registered mail, return receipt requested, addressed as follows:
<PAGE>

WORLD AIRWAYS, INC.:

13873 Park Center Road
Suite 400
Herndon, VA 22071
Attention: Executive Vice President,
Sales and Marketing
SITA: IADSSWO
Fax: 703-834-9412

MAS:

Bangunan MAS 30th Floor
Jalan Sultan Ismail
Kuala Lumpur 50250
Attention: Commercial Director
SITA: KULDCMH
Fax: 03-263-1718

or at such other addresses of any party hereto or any other party as such
party shall designate in a written notice served as hereinabove provided. The
effective date of any notice or request given in connection with this Agreement
shall be the date on which it is received by the addressee. All communications
involving operational matters arising under this Agreement shall be sent to:

WORLD: Operations Control SITA: IADOPWO
Fax: 703-834-9373/9204

MAS: Flight Control SITA: KULWWMH
Fax: 03-746-2850

ARTICLE TWENTY-TWO: OPERATIONAL HANDBOOK
-----------------------------------------

22.1. Operational Handbook. The parties agree to mutually draft, as soon as
--------------------
possible, a MAS/WORLD Operational Handbook for the purpose of detailing the
operational procedures governing the day-to-day actions of both parties in
<PAGE>

respect of the performance of services under this Agreement. Failure of the
parties to compile the Operational Handbook shall not affect any of their other
responsibilities and obligations under this Agreement. In the event of any
conflict between the Operational Handbook and the provisions of this Agreement,
the provisions of this Agreement shall govern.

ARTICLE TWENTY-THREE: COMPLETE AGREEMENT; INTERPRETATION
---------------------------------------------------------

23.1. Prior Agreements Superseded. Upon execution, this Agreement shall
---------------------------
supersede all previous Agreements and understandings respecting the provision of
passenger services to MAS by WORLD.

23.2. Interpretation. This Agreement constitutes the entire contract between
--------------
MAS and WORLD and shall not be varied, contradicted, explained or supplemented
by any oral agreement or representation, by course of dealing or performance or
by usage of trade, or amended or changed in any other manner except by an
instrument in writing of even or subsequent date hereto, executed by both
parties by their duly authorised representatives.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on behalf of their respective officers thereunto
duly authorised, as of the day and year first above written.

WORLD AIRWAYS, INC. MALAYSIAN AIRLINE SYSTEM BERHAD

By: ______________________ By: ___________________
Name: AHMAD KHATIB Name: BASHIR AHMAD
Title: Executive Vice President Title: Commercial Director
<PAGE>

ANNEX A-1

AIRCRAFT SPECIFICATIONS
-----------------------

Aircraft : McDonnell Douglas MD 11

Serial Number : 48518

Registration : N271WA

Engines : Pratt & Whitney 4462

Weights and Structural Data (lbs):

- MTOW 618,000

- MLW 450,000

- MZFW 420,000

- OEW 294,596*

Maintenance Program:

- A-Check : 400 Flight Hour Interval

- 1/2 C Check : 2100 Flight Hour Interval

- C-Check : 4200 Flight Hour or 15 Months

*This represents config. no. 2020, as follows:

28 C class and 294 Y seats
extended Flyaway kit included.

-33-
<PAGE>

ANNEX A-2

AIRCRAFT SPECIFICATIONS
-----------------------

Aircraft : McDonnell Douglas MD11

Serial Number : 48519

Registration : N273WA

Engines : Pratt & Whitney 4462

Weights and Structural Data (lbs):

- MTOW 618,000

- MLW 450,000

- MZFW 420,000

- OEW 295,000

Maintenance Program:

- A-Check : 400 Flight Hour Interval

- 1/2 C-Check : 2100 Flight Hour Interval

- C-Check : 4200 Flight Hour Interval

* This represents config. no. 2020, as follows:

28 C class and 294 Y class seats
extended flyway kit included.

-34-

<PAGE>

ANNEX B - 1

(Page 1 of 2)

-35-
<PAGE>

ANNEX B - 1

(Page 2 of 2)

-36-
<PAGE>

ANNEX B-2

REQUIRED SURCHARGE FOR
----------------------
BLOCK HOURS PER CYCLE LESS THAN 4.00
------------------------------------

In accordance with Article 4.3, the block hours surcharge to be assessed to MAS
is as follows:

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------
BLOCK HOURS/CYCLE 4.00 3.90 3.80 3.70 3.60 3.50 3.40 3.30 3.20 3.10 3.00
----------------------------------------------------------------------------------------------------------------------
BLOCK HOUR SURCHARGE 10.13 20.01 32.09 43.97 96.43 XX.XX XX.77 98.79 114.71 131.72
----------------------------------------------------------------------------------------------------------------------
</TABLE>

REQUIRED SURCHARGE FOR THE
--------------------------
USE OF WORLD'S INFLIGHT VIDEO EQUIPMENT
---------------------------------------

In accordance with Article 6.1(k) for each showing of the inflight video
provided by WORLD and screened by MAS, MAS shall pay WORLD $100 USD.

-37-
<PAGE>

ANNEX C-1

WORLD SPARE PARTS AND ENGINEERING SUPPORT

1. AIRCRAFT ROTABLE SPARES SUPPORT
-------------------------------

1.1 The Aircraft will be equipped with a standard and extended flyaway kit.
Attached flyaway kit list will be provided to ASU
Superintendent/Maintenance, Maintenance Controllers/Base Maintenance
Superintendent/Engineering Suppliers Manager/Line Maintenance
Superintendent - KUL.

1.2 Loans of spares from MAS will be free of charge for up to seven days.
Loan of spares will be rechargeable to WORLD from the eighth day as
tabulated below:

- 0 - 7th day - free of charge
- 8th - 10th day - 1/2% per day
- 11th day and thereafter - 1% per day
- Administrative, availability and handling fees - free of charge.
- Basis is MAS's acquisition cost.
- Maximum loan fee will be MAS's replacement cost.
- WORLD to have the option to either pay premium loan fees for MAS
parts that may leave with the Aircraft until parts are returned,
or purchase the part installed on the Aircraft (subject to
agreement by MAS) at MAS's replacement cost.

For the purpose of this paragraph 1.3, "day" shall mean each twenty-
four (24) hour period from the time the loaned spare is delivered to
WORLD for installation on the Aircraft.

1.3 Loan charges for the spare parts borrowed by MAS from MAS' pooling
partners or Vendors to support the operation of the Aircraft in the
Agreement shall be WORLD's account and shall be reimbursed to MAS by
WORLD at MAS cost.

1.4 WORLD Engineers are required to liaise with MAS Maintenance Control
Center for request of loans.

1.5 WORLD spares destined for KUL must be addressed Engineering Supplies
Manager, Malaysian Airlines System Berhad, Building E3 - Ground Floor,
MAS Technical Operation Center, 47200 Subang Airport, Selangor Darul
Ehsan, Malaysia, SITA KULEJMH copy KULELMH.

- 38 -
<PAGE>

1.6 For ease of custom clearance, each consignment should be limited to a
maximum of 25 items, except initial positioning of spares support.

1.7 WORLD spare will be held in MAS Engineering stores. WORLD Engineers
will have full access to the WORLD storage area and may pick up spares
from stores directly or request by walkie talkie through MCC or ASU
Progress Chaser.

1.8 Customs formalities and storage of spares will be at MAS expense.

1.9 Mas Superintendent of Engineering Supplies will arrange to provide,
subject to availability, one forklift for WORLD Stores personnel's use
in central Stores and Line Maintenance Hangar.

2. CONSUMABLE
----------

2.1 Engine oil 2380 and Hydraulic Fluid Skydrol 500B4 will be at MAS's
expenses.

2.2 Consumable available at free issue stores will be at MAS's expense.

3. STORAGE FACILITIES
------------------

During the Term, MAS shall provide WORLD free of charge suitable storage
space at Subang International Airport for spare parts and engines.

4. 4.1 APU AND PW4462 ENGINE SUPPORT
-----------------------------

WORLD will position at KUL one spare P & W 4462 engine and engine
change equipment and engine change equipment.

4.2 In the event of an engine change requirement, the Aircraft will be "two
engine ferried" to KUL at WORLD's cost for an engine change.

4.3 WORLD will have a two engine ferry crew available.

4.4 In the event that no engine or engine change equipment is available in
KUL, SEL, or ZRH, a P & W pool engine at the nearest location will be
utilized and the Aircraft will be "two engine ferried" to that location
at WORLD cost for the engine change and redelivery to a mutually agreed
location.

- 39 -
<PAGE>

5. WORLD ENGINEERING SUPPORT PERSONNEL
-----------------------------------

5.1 WORLD Engineering will be provided with a van for their movement within
Subang Airport. DCA driving permit required. MAS will assist WORLD
Engineering to obtain permits.

5.2 WORLD Engineering are welcome to use the MAS Engineers break/rest-room
and facilities. There is one rest room in the MAS hangar and one in ASU
at the transfer corridor facing bay 12 Subang Airport. Same applies in
all other Malaysian stations.

5.3 Reasonable office space will be provided to WORLD Maintenance Manager.

5.4 WORLD Engineers are encouraged must discuss administrative or technical
matters requiring urgent attention with MAS Duty Engineering or MAS
MCC.

5.5 All WORLD Engineers are required to obtain Airport passes for KUL, PEN
and all other stations as may be required. Two passport size photos are
required. MAS will assist in obtaining airport passes.

- 40 -
<PAGE>

ANNEX C-2

MAS ENGINEERING HANDLING PROCEDURES
-----------------------------------

This procedure is written as a general guide for engineering handling of WORLD
Aircraft for as long as the Aircraft are operating with MH flight numbers.

1. ACCEPTANCE CHECKS
-----------------

1.1 Acceptance checks by MAS will be carried out in KUL upon arrival of
the Aircraft inspection check sheet.

2. ENGINEERING GROUND HANDLING
---------------------------

2.1 Engineering ground handling at all scheduled stations will be
provided at MAS expense.

2.2 All equipment required to perform engineering handling will not be
rechargeable to WORLD.

2.3 WORLD Engineers will be at the Aircraft to oversee the maintenance
personnel provided by MAS.

2.4 WORLD Engineers will be at the allocated parking bays 15 minutes
prior to STA for all arrivals.

2.5 Ground Support Equipment provided to the Aircraft with the APU shut
down will not be re-chargeable to WORLD.

2.6 All aircraft servicing done by MAS Apron Services Unit in KUL or
PEN, and by MAS or it's agents at all other scheduled stations
specified in Annex B, is not rechargeable to WORLD. At KUL and PEN
only, a servicing team shall consist of two artisans.

2.7 MAS will provide artisans for ground to cockpit communications at
all stations.

2.8 Wheel build-up is not re-chargeable to WORLD.

-41-
<PAGE>

3. CERTIFICATION
-------------

3.1 WORLD Engineers will certify aircraft airworthiness release for all
stations. Engineers travelling as crewmembers are required to be in
possession of valid passports for each station.

4. ENGINEERING DELAYS
------------------

For line stations, a delay Telex will be prepared by WORLD personnel which
must be sent by MAS or its ground handling agent to KULEL WO KULKKWO KULELMH
KULWWMH IADDDWO IADMMWO and onward stations for delays of 3 minutes and
above. Details required in the telex will be as follows:

(i) Station/aircraft registration flight/flight number/date
(ii) Reason for delay
(iii) Duration of delay

4.4 In the event of lengthy delays, an update telex must be sent every
3 - 4 hours, followed by a final telex.

4.5 A delay warning telex per 4.3 is required whenever a delay of more than
30 minutes is anticipated.

5. INCIDENT REPORTING
------------------

5.1 All flight incidents reportable to the FAA must be copied to Malaysian
DCA per WORLD and MASs procedures using DCA irregularity form.

5.2 All ground incidents reportable to the FAA shall be reported to other
parties in accordance with WORLD and MAS procedures.

- 42 -
<PAGE>

ANNEX C - 3

TRANSIT SERVICES AND OTHER MAINTENANCE
--------------------------------------

1. Transit Services
----------------

During transit ground time of the aircraft at all scheduled stations
specified in the Flight Schedule as per Annex B, MAS will provide the
following services free of charge, under WORLD's supervision.

(a) Ramp Services

- Standby before arrival and after departure
- Position/remove landing gear locks
- Provide head sets
- Perform ramp to flight deck communication
- Report immediately all damages noticed at or inside the Aircraft
- Perform pre-flight check immediately before Aircraft departure.

(b) Aircraft Servicing

- Exterior cleaning of flight deck windows on request of WORLD
- Aircraft de-icing if necessary.

MAS shall provide all aircraft fuel, oil (Exxon 2380), de-icing,
lubricating and hydraulic fluid (skydrol 500 B-4) as well as:

- Arrangements with suppliers
- Supervision of fueling/defueling operations
- Arrangements with suppliers in connection with supervision of
replenishing operations

NOTE:

Flight release will be signed by WORLD's flight crew personnel.

- 43 -
<PAGE>

II. Other Maintenance
-----------------

A. Scheduled Maintenance

MAS and WORLD agree that if MAS is capable of performing scheduled
maintenance for the Aircraft, MAS shall provide such services, the
terms and conditions of which shall be incorporated under a separate
maintenance agreement to be mutually agreed upon by both parties.

B. Engine Changes

MAS shall provide WORLD free of charge at KUL with the hangar
facilities, and, if available tools and equipment necessary for
engine installation and removal. The same facilities and services
shall be provided by MAS or its agents at all other stations
specified in Annex B, subject to availability. Should that assistance
be provided by a party other than MAS, then WORLD shall reimburse MAS
for the assistance provided at MAS's cost.

C. Workshops and Other Engineering

All rechargeable requests for WORLD for manpower, equipment, spares
and materials must be accompanied by work order issued by WORLD
inspector or maintenance manager.

i. Repair of Spare Parts and Components

Materials costs incurred by MAS for WORLD rotable/spare parts and
components shall be charged to WORLD at MAS cost. Labor costs shall
be charged at the rate of RM 55 per manhour.

- 44 -
<PAGE>

ii. Other Repairs and Services

Repairs and all other services provided by MAS facilities in support of
the operation of the Aircraft in this Agreement shall be charged to
WORLD on a material used basis at MAS cost. MAS shall assist WORLD in
providing engineering drawings as required. All repairs accomplished by
MAS engineering shall be at WORLD cost and certified by WORLD Quality
Control.

iii. Major Structural Repairs and Modifications

In the case of major structural repairs and modifications WORLD shall
reimburse MAS for labor at a rate of RM 55 per manhour and for any
material costs at MAS cost.

iv. Rotable Parts

All rotable parts repaired or supplied by MAS must have an FAA Repair
Station Parts tag.

-45-
<PAGE>

ii. Other Repairs and Services

Repairs and all other services provided by MAS facilities in support of the
operation of the Aircraft in this Agreement shall be charged to WORLD on a
material used basis at MAS cost. MAS shall assist WORLD in providing
engineering drawings as required. All repairs accomplished by MAS
engineering shall be at WORLD cost and certified by WORLD Quality Control.

iii. Major Structural Repairs and Modifications

In the case of major structural repairs and modifications WORLD shall
reimburse MAS for labor at a rate of RM 55 per manhour and for any material
costs at MAS cost.

iv. Rotable Parts

All rotable parts repaired or supplied by MAS must have an FAA Repair
Station Parts tag.

- 45 -
<PAGE>

ANNEX D

HOTEL ACCOMMODATIONS
--------------------

MAS shall provide hotel accommodations for WORLD flight deck crewmembers and
Operational Personnel free of charge at all scheduled stations specified in the
flight schedule as per Annex B on an as needed basis at all other stations to
which the Aircraft operates at MAS request. MAS shall be invoiced directly by
the party providing such accommodations. Hotel accommodations at each station
shall be arranged by MAS at hotels acceptable to WORLD.

WORLD shall inform MAS's local station of the number of rooms required and shall
provide the names of the flight crew members no later than forty-eight (48)
hours prior to the Aircraft's scheduled arrival at such station. WORLD shall
promptly inform MAS regarding changed accommodation requirements.

Hotel to airport crew transportation shall be arranged and paid for by MAS's
local station.

- 46 -
<PAGE>

ANNEX E

POSITIONING/DEPOSITIONING OF WORLD PERSONNEL
--------------------------------------------

Transportation costs for WORLD personnel performing services in connection with
this Agreement shall be governed by the following provisions:

1. Positioning/Depositioning

(a) Transportation costs for the positioning/depositioning of WORLD
personnel to and from any MAS stations within the MAS network shall be
for MAS's accounts.

(b) All booking and ticketing necessary for the transportation of WORLD
personnel above shall be arranged through the following MAS office or
such other office as shall be advised by MAS:

MAS Flight Operations
AirTel Complex
Kuala Lumpur International Airport

2. Changes/Cancellations.

In the event MAS request a schedule change, a flight cancellation or an
additional flight, WORLD shall promptly advise MAS of additional crew
transportation requirements and any additional transportation costs
resulting from such change.

3. Additional Costs

Additional flight crew positioning costs resulting from air traffic control
or weather delays/cancellations shall be for the account of MAS.

4. Transportation of Dependants

Dependants of WORLD personnel performing services in connection with this
Agreement shall be entitled to EY transportation to KUL free of charge not
more than once in any calendar year. Passes for dependants shall be
available of MAS's scheduled passenger network only.

- 47 -

<PAGE>

ANNEX F

NOTIFICATION OF FLIGHT CANCELLATION,
------------------------------------

FLIGHT DELAYS OR DIVERSION
--------------------------

With respect to flight cancellations, flight delays or diversions of the
Aircraft, the parties agree to follow the following procedures:

1. Notification By WORLD

WORLD shall immediately notify MAS of any event which does, or is likely to,
delay or disrupt the scheduled operation of the Aircraft.

2. Notification By MAS

MAS shall immediately notify WORLD of any event which does, or is likely
to, delay or disrupt the scheduled operation of the Aircraft.

3. Remedies For Delays

Each party shall exercise its best efforts to minimize delays and
disruptions and ensure that the Aircraft operates in accordance with the
Schedule specified in Annex B. Any efforts by either party to minimize a
delay or disruption shall be communicated to the other party hereto, and if
possible, shall be agreed to by WORLD and MAS before implementation thereof.
In the event of any disagreement between WORLD and MAS regarding efforts to
remedy any delay or disruption, WORLD shall make the final decision.

4. Notification of Schedule Change

Any request for a schedule change resulting from a flight cancellation,
flight delay or diversion of the Aircraft, shall be issued by MAS's
operations control centre. Receipt of such request shall be confirmed
immediately by WORLD's dispatch center.

- 48 -
<PAGE>

ANNEX G

MAS CABIN PERSONNEL
-------------------

For the Term of this Agreement, MAS shall second to WORLD such cabin personnel
as are necessary for the performance of the flights contemplated by the
Agreement, in accordance with the following terms and conditions:

1. Qualifications
--------------

All MAS cabin personnel provided by MAS to WORLD in connection with this
Agreement shall be fully qualified on MD11 aircraft and fluent in the
English language. MAS shall provide WORLD with information regarding the
background, qualifications and employment history of all such cabin
personnel.

2. Secondment to WORLD
-------------------

MAS shall obtain from each cabin crewmember a statement in form and
substance satisfactory to WORLD evidencing the consent of such cabin
crewmember (i) to the transfer of such cabin crewmember to WORLD's services
for the purposes of this Agreement and (ii) to abide by all applicable
rules, regulations and procedures of WORLD and all applicable Federal
Aviation Regulations.

3. Supervision
-----------

For the Term of this Agreement, WORLD shall station in Kuala Lumpur a senior
flight attendant supervisor ("WORLD Supervisor") whose responsibility it
shall be to supervise all activities of the flight attendants seconded to
WORLD. The WORLD Supervisor shall be responsible for directing the
activities of the flight attendants including all matters involving
scheduling, training, performance and discipline. All flight attendants
shall report directly to the WORLD Supervisor.

4. Scheduling and Training
-----------------------

All scheduling of flight attendants shall be conducted by the WORLD
Supervisor or under his/her supervision and direction. All flight attendants
seconded to WORLD shall be required to satisfactorily complete all
applicable provisions of WORLD's FAA-approved training program for flight
attendants. All training shall be conducted by WORLD or under the
supervision and direction of WORLD.

- 49 -
<PAGE>

5. Compliance with Applicable Requirements
---------------------------------------

All flight attendants seconded to WORLD shall at all times be subject to,
and shall comply with, all applicable WORLD rules, regulations and
procedures and all applicable Federal Aviation Regulations to the same
extent as any other WORLD flight attendant. While on the Aircraft the
attendants shall be subject to the supervision and direction of the Captain.

6. Discharge
---------

At the sole discretion of the WORLD Supervisor, any flight attendant may be
discharged from secondment to WORLD. The WORLD Supervisor shall promptly
consult with MAS regarding any additional disciplinary action which might be
necessary or appropriate. A discharged flight attendant shall not be
eligible for subsequent secondment to WORLD. In the event of the discharge
of a flight attendant, MAS shall promptly provide a replacement in
accordance with the provisions of paragraph 1 above.

7. Compliance With Laws
--------------------

MAS represents that the secondment of flight attendants to WORLD in
accordance with the terms hereof will not violate any applicable laws,
rules, regulations or policies of Malaysia or any union contract or other
agreement to which it is a party or otherwise may be bound.

- 50 -
<PAGE>

ANNEX H

ROUTE QUALIFICATION OF COMMANDER, AGE LIMIT AND EXPERIENCE
----------------------------------------------------------
REQUIREMENT OF COCKPIT CREW.
----------------------------

1. Route Qualification of Commander

The Commander of the Aircraft must meet WORLD Route Qualification
requirement.

2. Age Limit

The Commander and the cockpit crew shall not be more than 60 years of age at
any time during the Term of the Agreement when operating as flight crew.

3. Experience Qualification

The Commander and the cockpit crew shall have not less than 5000 flying
hours.

- 51 -
<PAGE>

FREIGHTER SERVICES

AGREEMENT

BETWEEN

WORLD AIRWAYS, INC.

AND

MALAYSIAN AIRLINE SYSTEM BERHAD

OCTOBER 1, 1994

<PAGE>

FREIGHTER SERVICES AGREEMENT

ARTICLES ONE: AIRCRAFT; PROVISION OF SERVICES.......................1
1.1. Aircraft..............................................1
--------
1.2. Service/Schedule......................................2
----------------
1.3. Aircraft Positioning/Depositioning....................2
----------------------------------
1.4. Inspection by MAS.....................................2
-----------------

ARTICLE TWO: TERM .................................................3
2.1. Term..................................................3
----
2.2. Extension Option......................................3
----------------

ARTICLE THREE: MINIMUM GUARANTEED AIRCRAFT UTILIZATION...............3
3.1. Minimum Monthly Block Hour Guarantee..................3
------------------------------------
3.2. Adjustments to Minimum Monthly Block Hour
-----------------------------------------
Guarantee.............................................3
---------

ARTICLE FOUR: CHARGES...............................................4
4.1. Block Hour Rate.......................................4
---------------
4.2 Block Hour Definition.................................4
---------------------
4.3 Aircraft Position/Deposition Costs....................4
----------------------------------
4.4. Block Hour Surcharge..................................5
--------------------

ARTICLE FIVE: PAYMENT...............................................5
5.1. Payment Schedule......................................5
----------------
5.2. Payment Instructions..................................5
--------------------
5.3. Invoice...............................................6
-------
5.4. Final Accounting......................................6
----------------
5.5. Late Payment..........................................6
------------
5.6. No Counterclaims, Set-offs, etc. .....................7
--------------------------------

ARTICLES SIX: RESPONSIBILITIES OF WORLD AND MAS.....................7
6.1. Responsibilities of WORLD.............................7
-------------------------
6.2. Responsibilities of MAS...............................7
-----------------------
6.3. Payment Responsibilities of MAS.......................9
-------------------------------
6.4. Reciprocal Obligations................................9
----------------------

ARTICLE SEVEN: OPERATION OF THE AIRCRAFT.............................9
7.1. Control of The Aircraft...............................9
-----------------------
7.2. Right of Substitution................................10
---------------------
7.3. Lawful Use...........................................10
----------
7.4. Regulatory Compliance................................10
---------------------
7.5. Cargo Restrictions...................................10
------------------
7.6. Aircraft Livery......................................11
---------------
7.7. Return Condition of Aircraft.........................11
----------------------------

ARTICLE EIGHT: DOCUMENTATION........................................11
8.1. Operating Permits....................................11
-----------------
8.2. Cargo Documentation..................................12
-------------------
8.3. MAS Notification to WORLD............................12
-------------------------
8.4. Work Permits.........................................12
------------

-i-

<PAGE>

<TABLE>
<S> <C> <C>
ARTICLE NINE: SCHEDULE CHANGES; FLIGHT DISRUPTIONS................12
9.1. Schedule Changes....................................13
----------------
9.2. Flight Disruption...................................13
-----------------

ARTICLE TEN: USE OF AIRCRAFT BY WORLD............................15
10.1 Other Operations....................................15
----------------
10.2 Crew Training.......................................15
-------------

ARTICLE ELEVEN: EMPLOYEES...........................................15
11.1 Employees; Workmen's Compensation...................15
---------------------------------

ARTICLE TWELVE: LIENS AND TAXES.....................................15
12.1 Liens...............................................16
-----
12.2 Taxes...............................................16
-----

ARTICLE THIRTEEN: INSURANCE...........................................17
13.1. WORLD Aircraft Hull Insurance.......................17
-----------------------------
13.2. WORLD Third Party Aviation Legal
--------------------------------
Liability Insurance.................................17
-------------------
13.3. MAS Liability Insurance.............................19
-----------------------
13.4. Loss of Insurance...................................20
-----------------

ARTICLE FOURTEEN: INDEMNIFICATION.....................................20
14.1. Indemnification By WORLD............................21
------------------------
14.2. Indemnification By MAS..............................21
----------------------
14.3. Employee Claims.....................................23
---------------
14.4. No Consequential Damages............................23
------------------------
14.5. Mutual Assistance...................................23
-----------------

ARTICLE FIFTEEN: EARLY TERMINATION...................................23
15.1. Grounds For Early Termination.......................23
-----------------------------
15.2. Return of Equipment.................................26
-------------------

ARTICLE SIXTEEN: DEFAULTS BY MAS.....................................26
16.1. Events of Defaults by MAS...........................26
-------------------------
16.2. Remedies of WORLD...................................28
-----------------
16.3. Interest On Monies Owed.............................29
-----------------------

ARTICLE SEVENTEEN: DEFAULTS BY WORLD...................................29
17.1. Events of Defaults by WORLD.........................29
---------------------------
17.2. Remedies of MAS.....................................30
---------------
17.3. Interest On Monies Owed.............................31
-----------------------

ARTICLE EIGHTEEN: APPLICABLE LAW, DISPUTES............................31
18.1. Governing Law.......................................31
-------------
18.2. Arbitration.........................................31
-----------

ARTICLE NINETEEN: ASSIGNMENT..........................................32
19.1. Assignment By WORLD.................................32
-------------------
</TABLE>

-ii-
<PAGE>

<TABLE>

<S> <C> <C>
ARTICLE TWENTY: MISCELLANEOUS PROVISIONS............................32
20.1. Headings............................................32
--------
20.2. Counterparts........................................32
------------
20.3. Enforceability of Provisions........................32
----------------------------
20.4. Notices and Communications..........................33
--------------------------

ARTICLE TWENTY-ONE: OPERATIONAL HANDBOOK................................34
21.1. Operational Handbook................................34
--------------------

ARTICLE TWENTY-TWO: COMPLETE AGREEMENT; INTERPRETATION..................34
22.1. Prior Agreements Superseded.........................34
---------------------------
22.2. Interpretation......................................34
--------------

ANNEXES
-------

Annex A-1 MD-11F Aircraft Specifications......................36
Annex A-2 MD-11CF Aircraft Specification......................38
Annex B Flight Schedule/Payload.............................39
Annex B-1 Block Hour Surcharge................................41
Annex C-1 WORLD Spare Parts and Engineering Support...........42
Annex C-2 MAS Engineering Handling Procedures.................54
Annex C-3 Transit Services and Other Maintenance..............56
Annex D Hotel Accommodations................................58
Annex E Positioning/Depositioning of WORLD Personnel........59
Annex F Notification of Flight Cancellations, Flight
Delays or Diversions................................60
Annex G Notices.............................................61
Annex H Route Qualification of Commander, Age Limit
and Experience......................................62

</TABLE>

-iii-

<PAGE>

EXHIBIT 10.102

FREIGHTER SERVICES
AGREEMENT
BETWEEN
WORLD AIRWAYS, INC.
AND
MALAYSIAN AIRLINE SYSTEM BERHAD
OCTOBER 1, 1994
<PAGE>

FREIGHTER SERVICES AGREEMENT
<TABLE>

<S> <C> <C>
ARTICLE ONE: AIRCRAFT; PROVISION OF SERVICES..................... 1
1.1. Aircraft............................................ 1
--------
1.2. Service/Schedule.................................... 2
----------------
1.3. Aircraft Positioning/Depositioning.................. 2
----------------------------------
1.4. Inspection by MAS................................... 2
-----------------

ARTICLE TWO: TERM................................................ 3
2.1. Term................................................ 3
----
2.2. Extension Option.................................... 3
----------------

ARTICLE THREE: MINIMUM GUARANTEED AIRCRAFT UTILIZATION............. 3
3.1. Minimum Monthly Block Hour Guarantee................ 3
------------------------------------
3.2. Adjustments to Minimum Monthly Block Hour
-----------------------------------------
Guarantee........................................... 3
---------

ARTICLE FOUR: CHARGES............................................. 4
4.1. Block Hour Rate..................................... 4
---------------
4.2. Block Hour Definition............................... 4
---------------------
4.3. Aircraft Position/Deposition Costs.................. 4
----------------------------------
4.4. Block Hour Surcharge................................ 5
--------------------

ARTICLE FIVE: PAYMENT............................................. 5
5.1. Payment Schedule.................................... 5
----------------
5.2. Payment Instruction................................. 5
-------------------
5.3. Invoice............................................. 6
-------
5.4. Final Accounting.................................... 6
----------------
5.5 Late Payment........................................ 6
------------
5.6 No Counterclaims, Set-offs, etc. ................... 7
--------------------------------

ARTICLE SIX: RESPONSIBILITIES OF WORLD AND MAS................... 7
6.1. Responsibilities of WORLD........................... 7
-------------------------
6.2. Responsibilities of MAS............................. 7
-----------------------
6.3. Payment Responsibilities of MAS..................... 9
-------------------------------
6.4. Reciprocal Obligations.............................. 9
----------------------

ARTICLE SEVEN: OPERATION OF THE AIRCRAFT........................... 9
7.1. Control of The Aircraft.............................10
-----------------------
7.2. Right of Substitution...............................10
----------------------
7.3. Lawful Use..........................................10
----------
7.4. Regulatory Compliance...............................10
---------------------
7.5. Cargo Restrictions..................................10
------------------
7.6. Aircraft Livery.....................................11
---------------
7.7. Return Condition of Aircraft........................11
----------------------------

ARTICLE EIGHT: DOCUMENTATION.......................................11
8.1. Operating Permits...................................11
-----------------
8.2. Cargo Documentation.................................12
-------------------
8.3. MAS Notification to WORLD...........................12
-------------------------
8.4. Work Permits........................................12
------------
</TABLE>

-i-
<PAGE>

ARTICLE NINE: SCHEDULE CHANGES; FLIGHT DISRUPTIONS ................... 12
9.1. Schedule Changes ....................................... 13
----------------
9.2. Flight Disruption ...................................... 13
-----------------

ARTICLE TEN: USE OF AIRCRAFT BY WORLD ............................... 15
10.1 Other Operations ....................................... 15
----------------
10.2 Crew Training .......................................... 15
-------------

ARTICLE ELEVEN: EMPLOYEES .............................................. 15
11.1 Employees; Workmen's Compensation ...................... 15
---------------------------------

ARTICLE TWELVE: LIENS AND TAXES ........................................ 15
12.1 Liens .................................................. 16
-----
12.2 Taxes .................................................. 16
-----

ARTICLE THIRTEEN: INSURANCE .............................................. 17
13.1. WORLD Aircraft Hull Insurance .......................... 17
-----------------------------
13.2. WORLD Third Party Aviation Legal
--------------------------------
Liability Insurance .................................... 17
-------------------
13.3. MAS Liability Insurance ................................ 19
-----------------------
13.4. Loss of Insurance ...................................... 20
-----------------

ARTICLE FOURTEEN: INDEMNIFICATION ........................................ 20
14.1. Indemnification By WORLD ............................... 21
------------------------
14.2. Indemnification by MAS ................................. 21
----------------------
14.3. Employee Claims ........................................ 23
---------------
14.4. No Consequential Damages ............................... 23
------------------------
14.5. Mutual Assistance ...................................... 23
-----------------

ARTICLE FIFTEEN: EARLY TERMINATION ...................................... 23
15.1. Grounds For Early Termination .......................... 23
-----------------------------
15.2. Return of Equipment .................................... 26
-------------------

ARTICLE SIXTEEN: DEFAULTS BY MAS ........................................ 26
16.1. Events of Defaults By MAS .............................. 26
---------------------------
16.2. Remedies of WORLD ...................................... 28
-----------------
16.3 Interest On Monies Owed ................................ 29
-----------------------

ARTICLE SEVENTEEN: DEFAULTS BY WORLD ...................................... 29
17.1. Events of Defaults By WORLD ............................ 29
---------------------------
17.2. Remedies of MAS ........................................ 30
---------------
17.3. Interest On Monies Owed ................................ 31
-----------------------

ARTICLE EIGHTEEN: APPLICABLE LAW, DISPUTES ............................... 31
18.1. Governing Law .......................................... 31
-------------
18.2. Arbitration ............................................ 31
-----------

ARTICLE NINETEEN: ASSIGNMENT ............................................. 32
19.1. Assignment By WORLD .................................... 32
-------------------

-ii-
<PAGE>

ARTICLE TWENTY: MISCELLANEOUS PROVISIONS ...................... 32
20.1. Headings ...................................... 32
--------
20.2. Counterparts .................................. 32
------------
20.3. Enforceability of Provisions .................. 32
----------------------------
20.4. Notices and Communications .................... 33
--------------------------

ARTICLE TWENTY-ONE: OPERATIONAL HANDBOOK .......................... 34
21.1. Operational Handbook .......................... 34
--------------------

ARTICLE TWENTY-TWO: COMPLETE AGREEMENT; INTERPRETATION ............ 34
22.1. Prior Agreements Superseded ................... 34
---------------------------
22.2. Interpretation ................................ 34

ANNEXES
-------

Annex A-1 MD-11F Aircraft Specifications ................ 36
Annex A-2 MD-11CF Aircraft Specification ................ 38
Annex B Flight Schedule/Payload ....................... 39
Annex B-1 Block Hour Surcharge .......................... 41
Annex C-1 WORLD Spare Parts and Engineering Support ..... 42
Annex C-2 MAS Engineering Handling Procedures ........... 54
Annex C-3 Transit Services and Other Maintenance ........ 56
Annex D Hotel Accommodations .......................... 58
Annex E Positioning/Depositioning of WORLD
Personnel ..................................... 59
Annex F Notification of Flight Cancellations,
Flight Delays or Diversions ................... 60
Annex G Notices ....................................... 61
Annex H Route Qualification of Commander, Age Limit
and Experience ................................ 62

-iii-
<PAGE>

FREIGHTER SERVICES AGREEMENT

THIS FREIGHTER SERVICES AGREEMENT (together with the Annexes attached
hereto, the "Agreement") dated October ___, 1994, effective as of and from June
15, 1994, is by and between WORLD AIRWAYS, INC., a Delaware corporation having
its principal place of business at 13873 Park Center Road, Suite 490, Herndon,
Virginia, 22071 United States of America ("WORLD") and MALAYSIAN AIRLINE SYSTEM
BERHAD, a corporation organized and existing under the laws of Malaysia having
its registered office at 33rd Floor, Bangunan MAS, Jalan Sultan Ismail, 50250
Kuala Lumpur, Malaysia ("MAS").

WITNESSETH
----------

WHEREAS, MAS and WORLD desire to novate the Freighter Services Cargo
Agreement dated June 15, 1994 by and between World Airways, Inc. and Malaysian
Airline System Berhad (the "June Agreement"), with the effect of extinguishing
the June Agreement and substituting this Agreement in its stead for the period
since June 15, 1994 and continuing through the term of this Agreement;

WHEREAS, MAS wishes to obtain from WORLD and WORLD is prepared to provide
to MAS upon the terms and conditions set forth in this Agreement, one McDonnell
Douglas MD-11F aircraft and one McDonnell Douglas MD-11CF aircraft, as specified
in Annex A-1 and Annex A-2 to this Agreement in order to perform the freighter
services specified herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
WORLD and MAS agree as follows:

ARTICLE ONE: AIRCRAFT; PROVISION OF SERVICES
--------------------------------------------

1.1 Aircraft. WORLD shall provide the aircraft ("Aircraft"), specified
--------

1
<PAGE>

in Annex A-1 and Annex A-2, together with crews, for the performance of
this Agreement. The parties may from time to time amend Annex A to include
additional aircraft, which amendment shall be in writing executed by both
parties. Any such additional aircraft will, upon delivery to MAS, be
subject to the terms and conditions of this Agreement, including the Block
Hour Rate then in effect. In the event of any conflict between the
definitions and terms set forth in Annex A and the definitions and terms
set forth in this Agreement, the definitions and terms set forth in Annex A
shall govern.

1.2 Service/Schedule. WORLD shall operate the Aircraft for the purpose of
----------------
carrying cargo for MAS on the routes and in accordance with the schedule
set forth in Annex B.

1.3 Aircraft Positioning/Depositioning. The first flight to be performed by
----------------------------------
WORLD under this Agreement shall operate on a live basis from Los Angeles.
The last flight to be performed by WORLD under to this Agreement shall be
operated on a live basis and terminate in Los Angeles or at such other
point as WORLD and MAS shall agree.

1.4 Inspection by MAS. Prior to the commencement of the first flight to be
-----------------
performed under this Agreement, MAS shall have the right to inspect the
Aircraft. Upon the request of MAS, WORLD shall also make the Aircraft
available for inspection by representatives of the Malaysian Department of
Civil Aviation. Any inspection conducted pursuant to this Article 1.4 shall
not interfere with the operation of the Aircraft in WORLD's commercial
services. In the event the MD-11-CF aircraft is inferior to the MD-11-F
aircraft with respect to capacity, capability or utility MAS and WORLD
agree to negotiate any appropriate adjustment to the then current Block
Hour Rate.

2
<PAGE>

ARTICLE TWO: TERM
-----------------

2.1 Term. The term of this Agreement ("Term") shall be from June 15, 1994 and
----
shall expire on September 30, 1999, unless terminated earlier in accordance
with the provisions of this Agreement.

2.2 Extension Option. MAS shall have the right to extend this Agreement (the
----------------
"Extension Option") for an additional one year period commencing on October
1, 1999 and expiring on September 30, 2000 (the "Extension Period"),
provided (i) that MAS provides written notice of this intention to exercise
--------
this Extension Option no later than April 1, 1999 and (ii) that MAS and
WORLD agree in writing on an adjusted block hour rate for the Extension
period no later than May 1, 1999.

ARTICLE THREE: MINIMUM GUARANTEED AIRCRAFT UTILIZATION.
------------------------------------------------------

3.1 Minimum Monthly Block Hour Guarantee. MAS hereby guarantees to WORLD in
------------------------------------
connection with the performance of this Agreement a minimum of 400 block
hours of aircraft utilization for each month that this Agreement shall be
in effect ("Minimum Monthly Block Hour Guarantee").

3.2 Adjustments to Minimum Monthly Block Hour Guarantee. In the event an
---------------------------------------------------
aircraft is unavailable to perform one or more regularly scheduled flights
due to regularly scheduled maintenance, the number of hours the aircraft is
prevented from operating due to regularly scheduled maintenance shall be
deducted from the Minimum Monthly Block Hour Guarantee unless (i) WORLD
supplies a replacement aircraft with equivalent or greater capacity to
perform the

3
<PAGE>

operation or (ii) WORLD performs a substitute flight within fifteen (15)
days of any such unavailability of the aircraft due to regularly scheduled
maintenance.

ARTICLE FOUR: CHARGES
---------------------

4.1 Block Hour Rate. In connection with the operation of the Aircraft
---------------
hereunder, MAS shall pay to WORLD the block hour rate of USD Four Thousand
Two Hundred ($4,200) per Block Hour. Every six months from the date each
aircraft is placed in service to MAS, WORLD and MAS agree to review the
financial results for each aircraft as it relates to performance of the
cargo services conducted pursuant to this Agreement, and to increase the
Block Hour Rate as they may agree to be necessary. It is the desire of the
parties to increase the Block Hour Rate as may be necessary to make the
services contemplated hereunder equitable, meaningful and economically
viable for each party.

4.2 Block Hour Definition. For the purpose of this Agreement, the term "Block
---------------------
Hour" shall be defined as every hour or portion thereof that the Aircraft
is operating calculated from the removal of the wheel chocks upon departure
until insertion of the wheel chocks upon arrival, as recorded in the
Aircraft's log book.

4.3 Aircraft Positioning/Depositioning Costs. In the event that (i) MAS
----------------------------------------
requests that WORLD operate the first flight to be performed under this
Agreement from a point other than Los Angeles, or requests that the last
flight to be operated by WORLD under this Agreement terminate at a point
other than Los Angeles, and (ii) that WORLD agrees to such request, then
MAS shall pay WORLD for any positioning or depositioning costs incurred as
the result of such request at the

4
<PAGE>

Block Hour Rate specified in Article 4.1.

4.4 Block Hour Surcharge. To compensate WORLD for higher costs of operation, in
--------------------
the event that the hour/cycle ratio for the Aircraft while operating the
services to be provided under this Agreement shall fall below 4.0/1 for any
month beginning Oct. 1, 1994 until the end of the Term, MAS shall pay to
WORLD an additional charge as specified in Annex B-1.

ARTICLE FIVE: PAYMENT
---------------------

5.1. Payment Schedule. Upon execution of this Agreement, MAS shall pay to WORLD
----------------
the block hour charges for all scheduled flights to be operated during the
first calendar month of the Term. Thereafter, on the twenty-third day of
each month that this Agreement shall be in effect MAS shall pay to WORLD
the amount of USD ONE MILLION SIX HUNDRED EIGHTY THOUSAND ($1,680,000)
(the amount equal to the Minimum Monthly Block Hour Guarantee multiplied
by the agreed upon Block Hour rate).

5.2. Payment Instructions. Any amounts due by MAS to WORLD hereunder shall be
--------------------
paid by MAS in U.S. Dollars ("USD") by wire transfer in immediately
available funds to the following account:

Nations Bank
Washington, D.C.
ABA No. 054001204

for credit to

Account No. 20-8671-2080
World Airways, Inc.

5
<PAGE>

such taxes or levies, in which event MAS shall pay to WORLD such
additional amounts as may be necessary to ensure that WORLD receives an
amount in U.S. Dollars equal to the full amount which it would have
received had the payment not been subject to such taxes or levies.

5.3. Invoice. WORLD shall invoice MAS within ten (10) calendar days after the
-------
end of each month during the Term hereof an amount equal to the greater of
-------
(i) block hours actually flown or (ii) the Minimum Monthly Block Hour
Guarantee. If the amount of such invoice exceeds the payment made by MAS
under the payment schedule specified in Article 5.1., MAS shall pay the
amount of such excess to WORLD no later than twenty (20) calendar days
after receipt of such invoice. If an adjustment is made to the Minimum
Monthly Block Hour Guarantee pursuant to Article 3.2, WORLD shall issue
MAS a credit note for the amount of any such adjustment not later than
twenty (20) calendar days after the end of the month.

5.4. Final Accounting. the parties shall meet no later than ten (10) calendar
----------------
days after December 31, 1994, and no later than ten (10) calendar days
after the end of each calendar quarter thereafter that this Agreement
shall be in effect to conduct a review of accounting matters arising out
of or related to this Agreement. Within sixty (60) calendar days after the
end of the Term or the earlier termination of this Agreement, WORLD shall
provide MAS with a final accounting of all amounts due under this
Agreement; and within thirty (30) calendar days of receipt of such final
accounting (i) MAS shall pay to WORLD all outstanding or unpaid amounts,
or (ii) WORLD shall refund to MAS all amounts received but not due to
WORLD.

5.5. Late Payment. Any late payment by either party of any amount due
------------

6
<PAGE>

under this Agreement shall bear interest from the date such payment is due
at the rate of ten percent (10%) per annum, and the party to whom such
amount is due shall be entitled to recover judgement for the total amount
due, including such interest, and any costs of collection incurred in
connection therewith, including reasonable legal expenses and attorneys'
fees.

5.6 No Counterclaims, Set-offs, etc. MAS's obligation to pay all sums due
--------------------------------
hereunder shall be absolute and unconditional and shall not be subject to
any right of set-off, counterclaim, defense, abatement, suspension,
deferment, diminution, reduction, recoupment or other right which MAS may
have against WORLD or any other person for any reason whatsoever.

ARTICLE SIX: RESPONSIBILITIES OF WORLD AND MAS.
-----------------------------------------------

6.1 Responsibilities of WORLD. WORLD at its own cost and expense shall provide:
--------------------------

(a) The Aircraft as described in Annex A-1 and Annex A-2 together with
flight crewmembers for each flight, as reflected in the ANNEX B
flight schedule;

(b) All salaries and per diem allowances for flight crewmembers;

(c) All scheduled airframe and engine maintenance necessary for the
operation of the Aircraft in accordance with WORLD's FAA-approved
maintenance program, except as specified in Annex C and 6.2.;

(d) Insurance in accordance with Article Thirteen; and

(e) Rotable spare parts support as specified in Annex C-1.

6.2 Responsibilities of MAS. MAS at its own cost and expense shall provide:
------------------------

7
<PAGE>

(a) All pallet buildup and breakdown and warehousing, and cargo loading and
unloading at all stations in accordance with WORLD's Weight and Balance
Manual;
(b) Aircraft handling at all stations, excluding aircraft certification;
(c) Landing/take-off fees at all stations;
(d) Navigation fees over the routing specified in Annex B and for any and all
ad hoc operations requested by MAS;
(e) Aircraft parking, lighting fees at all stations and security fees and
other airport fees.
(f) Aircraft fuel, oil (Exxon 2380), de-icing, lubricating and hydraulic fluid
(Chevron Hyjet IV or 500-B4/LD4);
(g) Aircraft transit maintenance and other aircraft maintenance as specified
in Annex C-3 at all stations along the routing specified in Annex B and
for any and all ad hoc operations requested by MAS;
(h) Hotel accommodations for WORLD flight deck crewmembers including ground
transportation between hotel and airport;
(i) Commissary supplies and catering for WORLD flight deck crewmembers and
other WORLD Personnel traveling onboard in support of WORLD's
obligations under this Agreement;
(j) All Unit Loading Devices ("ULDs"), pallets and nets.
(k) All transportation of spare engines and spare parts for the Aircraft, on
a positive space basis, provided however, that WORLD will use reasonable
----------------
efforts to provide MAS with prior notice of WORLD's requirements;
(l) Use of MAS's facilities by WORLD personnel at all scheduled stations
specified in Annex B, with access to MAS telephone, fax, SITA and Telex
communications equipment;
(m) Insurance in accordance with Article Thirteen;
(n) Identification of all agents and subcontractors retained by MAS to perform
its responsibilities hereunder.
(o) FOC "C" class firm airline transportation on the air services of MAS

8
<PAGE>
for WORLD's aircrew, positioning staff and other executive personnel
on duty travel directly related to performing services under this
Agreement;
(p) Cockpit and interior cleaning of the Aircraft at all stations.

6.3. Payment Responsibilities of MAS. MAS shall arrange for all invoices
-------------------------------
for services provided to MAS as set forth in Article 6.2 to be sent
to and paid directly by MAS, except as MAS and WORLD agree in
writing.

6.4. Reciprocal Obligations. All other costs and expenses arising out of
----------------------
the operation of the Aircraft in accordance with this Agreement and
not expressly set forth in this Agreement shall be mutually agreed
upon. In the event either party does not perform its obligations
hereunder, the other party shall have the right but not the
obligation to perform any of that party's responsibilities at the
other's cost. Upon demand the non-performing party shall reimburse
the other party for any amount it has paid in connection with the
performance of responsibilities hereunder.

ARTICLE SEVEN: OPERATION OF THE AIRCRAFT
-----------------------------------------

7.1. Control of The Aircraft. WORLD at all times shall have operational
-----------------------
control over all flights performed under this Agreement and shall
be solely responsible for compliance with all applicable United
States Federal Aviation Administration ("FAA") regulations in
connection with the flight operations contemplated under this
Agreement. Consistent with this provision, WORLD shall have the sole
authority to determine whether a particular flight may be safely
operated, to assign crew members for particular flights, to dispatch
and release flights, to direct crew members and to initiate and
terminate

<PAGE>

flights. The Captain of the Aircraft shall be in command of the Aircraft
and shall have complete discretion concerning the operation of the
Aircraft and the initiation and termination of any flight, and MAS
undertakes to accept all decisions of the Captain. The Captain shall have
full authority and control in the operation of the Aircraft and shall have
full authority and control over other crew members and their duties during
flight time.

7.2 Right of Substitution. WORLD shall have the right at any time to replace
---------------------
the Aircraft with another aircraft having a payload capacity equal to or
greater than the Aircraft's. WORLD shall promptly inform MAS regarding any
such substitutions.

7.3 Lawful Use. WORLD shall not be required to operate the Aircraft contrary to
----------
any applicable law or regulation of any government or governmental agency
having jurisdiction over the Aircraft, nor shall WORLD be required to
operate the Aircraft into or over Afghanistan, Angola, Chad, El Salvador,
Ethiopia, Iraq, Kuwait, Laos, Liberia, Libya, Nicaragua, Somalia, Sudan,
Zaire, Haiti, those states that are or were part of Yugoslavia, former
Republics of USSR other than Russia, any country subject to United Nations
sanctions or any other territory or jurisdiction or in any manner or
fashion that would jeopardize WORLD's insurance coverage for the Aircraft.

7.4 Regulatory Compliance. MAS shall ensure that carriage of all cargo
---------------------
hereunder shall be in accordance with FAA and IATA rules as applicable and
any other applicable government regulations.

7.5 Cargo Restrictions. The Aircraft shall not be used for the carriage of
------------------
weapons or munitions of war. Livestock shall be carried only in accordance
with specifications and procedures mutually acceptable to

<PAGE>

the parties hereto.

7.6. Aircraft Livery. At MAS's request, WORLD agrees to repaint the Aircraft in
---------------
MAS's livery. MAS shall bear all costs (including the cost of repairing
any damage to the Aircraft in connection therewith) of applying the MAS
livery to the Aircraft and repainting the Aircraft with WORLD's livery or
as otherwise directed by WORLD provided that the cost of repainting the
Aircraft with a livery other than WORLD's does not exceed the cost of
painting the Aircraft in WORLD's livery. MAS's under this Article 7.6 are
subject to the regulations of the FAA regarding aircraft markings on U.S.
registered aircraft.

7.7. Return Condition of Aircraft. At the end of the Term hereof or upon the
----------------------------
earlier termination of this Agreement, the Aircraft dedicated to the
services hereunder shall be returned into WORLD's operations in as good
condition as upon the commencement of the services, normal wear and tear
excepted.

ARTICLE EIGHT: DOCUMENTATION
----------------------------
8.1. Operating Permits. Except where governmental regulations require action by
-----------------
WORLD, MAS shall obtain and maintain all necessary governmental permits,
traffic rights, operating authorities and franchises, and any other
authorizations required in connection with the performance of this
Agreement. At MAS's cost and expense, WORLD shall assist MAS in obtaining
such authorizations. Failure of MAS to obtain any such authorizations,
provided such failure is due to wilful neglect, will not be cause to
release MAS from its other obligations under the Agreement.

<PAGE>

8.2. Cargo Documentation. MAS shall contract as principal and as carrier for
-------------------
all cargo to be carried on the Aircraft and shall not under any
circumstances have the authority to enter into any contract on behalf of,
or binding upon, WORLD. MAS's standard conditions of carriage shall govern
the carriage of cargo on the Aircraft and MAS's airwaybills or other
documents of carriage shall be used for cargo to be carries on the
Aircraft. MAS shall be responsible for ensuring that the carriage of cargo
pursuant to this Agreement complies with all applicable immigration,
health, police, customs, security and other laws, regulations and
requirements of each country from, to or through which each individual
flight is operated. All airwaybills shall have attached to them all
documents necessary to comply with such laws, regulations and
requirements.

8.3. MAS Notification to WORLD. MAS will endeavor to notify World's Dispatch of
-------------------------
the estimated payload for the Aircraft at least four (4) hours prior to
the departure of each flight. MAS shall furnish the cargo manifest, any
other cargo documentation and all transportation documents necessary for
each flight and shall deliver the same to the Captain of the Aircraft in
sufficient time to avoid delay to the schedule departure of the Aircraft
but in no case less than thirty (30) minutes prior to departure.

ARTICLE NINE: SCHEDULE CHANGES; FLIGHT DISRUPTIONS
--------------------------------------------------

12
<PAGE>

9.1. Schedule Changes. MAS may request changes to the schedule specified
-----------------
in Annex B provided, however, that (i) such changes to the schedule
-----------------
shall not reduce the Minimum Monthly Block Hour Guarantee; (ii)
arrival and departure times are available at all airports on the
requested routing so as to permit WORLD to perform the services to
be provided hereunder and to fulfill its other contractual
commitments; and (iii) WORLD shall be reimbursed by MAS for all
additional costs resulting from such schedule changes including
without limitation, any additional crew costs or Aircraft
maintenance costs. Any request for a schedule change shall be issued
by MAS's operations control centre. Receipt of such request shall be
confirmed immediately by WORLD's dispatch centre. WORLD reserves the
right (which right shall not be unreasonably exercised) to reject
any schedule change request by MAS.

9.2. Flight Disruption.
------------------
(A) MAS shall bear all costs (except consequential damages of WORLD)
arising out of a flight delay, flight cancellation, or diversion of
the Aircraft which is caused by:

(i) MAS's request;

(ii) Weather conditions or air traffic control;

(iii) Any work stoppage by MAS's employees, agents and servants; or

(iv) Any act or omission of MAS's employees, agents and servants
that affects the operation of the Aircraft.

Flight delays, flight cancellations or diversions of the Aircraft
caused by any of the reasons specified in this Article 9.2(A) shall

<PAGE>

not reduce the Minimum Monthly Block Hour Guarantee.

(B) WORLD shall bear all costs (except consequential damages of MAS)
arising out of a flight delay, flight cancellation or diversion of
the Aircraft which is caused by:

(i) A mechanical failure on the Aircraft, except as provided
under Article 9.2(A)(iv);
(ii) Failure of WORLD's flight deck crew members to report for
duty; or
(iii) Any work stoppage by WORLD's employees, agents and servants.

(C) In the event of a flight delay, flight cancellation or diversion of
the Aircraft under Article 9.2(B), WORLD shall exercise reasonable
efforts to substitute another aircraft having a payload capacity
equal to or greater than the Aircraft's. In the event of such
substitution, reference to "the Aircraft" in this Agreement shall be
construed as reference to the substituted aircraft. In lieu of
substituting its own aircraft, WORLD shall have the right to provide
MAS with substitute service from another air carrier, provided that
the aircraft operated by the substitute air carrier has a payload
capacity equal to or greater than the Aircraft's.

(D) Neither WORLD nor MAS shall be responsible for flight delays, flight
cancellations or diversions of the Aircraft that are due to an Act
of God, civil war, riot, insurrection, civil disturbance, fire,
flood, explosion, earthquake, hurricane typhoon, epidemic or
quarantine restriction, work stoppage (other than as specified in
this Article 9.2 (A) or (B) or any other event beyond either party's
control. In the event of such flight delay, flight cancellation or
diversion, MAS shall pay to WORLD a reduced block hour rate of USD

<PAGE>

$2,350 per block hour for each scheduled block hour not flown by
WORLD during the period that the Aircraft is unable to operate.

ARTICLE TEN: USE OF AIRCRAFT BY WORLD
-------------------------------------

10.1. Other Operations. The Aircraft may be used by WORLD to perform other
-----------------
contractual commitments and in connection with its own operations
when not performing services for MAS hereunder. During such use of
the Aircraft by WORLD any services (including, but not limited to,
fuel) provided to WORLD by MAS or its suppliers shall be reimbursed
to MAS by WORLD at MAS's cost.

10.2. Crew Training. Provided that such use of the Aircraft does not
--------------
interfere with the operation of the Aircraft on MAS's behalf, WORLD
may use the Aircraft while performing services for MAS hereunder for
(i) flight crew training, and (ii) transportation of flight crews or
other WORLD personnel for purposes of positioning or training.

ARTICLE ELEVEN: EMPLOYEES
-------------------------

11.1. Employees; Workmen's Compensation Insurance. It is understood and
--------------------------------------------
agreed that the employees of the respective parties hereto shall
continue as employes of that party and shall not be deemed employees
of the other party. Each party shall cover its employees with such
workmen's compensation insurance, or its equivalent, as shall be
required by law, and upon request shall provide the other party with
evidence of such coverage.

ARTICLE TWELVE: LIENS AND TAXES
-------------------------------

<PAGE>

12.1. Liens. MAS shall have no right, title or interest in the Aircraft.
------
Neither MAS nor its employees, agents or servants shall create, incur,
consent to, or suffer to exist any lien, attachment, mortgage or other
encumbrance upon or against the Aircraft other than Liens to which WORLD
gives its written consent ("Liens"). MAS shall indemnify, defend and
hold WORLD harmless from and against any and all Liens created by MAS
either by act or commission. If at any time such Liens shall exist or be
levied upon the Aircraft, MAS shall immediately cause the same to be
removed or discharged. In the event MAS shall fail to so remove or
discharge any Liens, WORLD may do so, and MAS shall pay to WORLD the
amount paid by WORLD in connection with removing or discharging such
Lien, including reasonable legal expenses and attorneys' fees, together
with interest computed at the rate of ten percent (10%) per annum or the
maximum rate allowable by law, whichever is lower, from the date payment
is made by WORLD until WORLD is paid by MAS.

12.2. Taxes. MAS shall pay or cause to be paid, and shall hold WORLD harmless
------
from and against any and all taxes, levies, imposts, customs, duties,
charges, currency surcharges, fees, assessments, deductions, or
withholdings of any kind or nature (collectively, together with interest
and penalties thereon, "Taxes") levied, assessed or imposed on WORLD or
its officers, directors, agents, servants and employees ("Tax
Indemnities") or against the Aircraft by any government or agency in
connection with the performance of this Agreement. MAS's obligations
hereunder shall not include Taxes imposed by the United States of
America or any state of local political subdivision thereof that are
based on, or measured by, the net income of any of the Tax Indemnities.
MAS at its own expense may contest such Taxes in proceedings brought in
good faith where a reasonable basis exists for such challenge but only
if such

<PAGE>

proceedings will not result in a forfeiture of the Aircraft. In the event
MAS shall fail to pay such Taxes, WORLD may do so, and MAS shall pay to WORLD
the amount paid by WORLD in connection with such Taxes, including reasonable
legal expenses and attorneys' fees, together with interest computed at the rate
of ten percent (10%) per annum or the maximum rate allowable by law, whichever
is lower, from the date payment is made by WORLD until WORLD is paid by MAS.

ARTICLE THIRTEEN: INSURANCE
---------------------------

13.1 WORLD Aircraft Hull Insurance. WORLD shall procure and maintain hull
-----------------------------
insurance in respect of the Aircraft and the operation thereof under this
Agreement against all risks including was risks and hijacking and kindred
perils. WORLD shall furnish MAS certificates containing details of such
insurance not later than fourteen (14) calendar days prior to commencement of
the services to be performed by WORLD under this Agreement. Such hull insurance
shall provide for a waiver of underwriters' right of recovery (waiver of
subrogation) but only to the extent that WORLD has waived its right of recovery
under this Agreement against MAS, its officers, directors, agents, servants and
employees.

13.2 WORLD Third Party Aviation Legal Liability Insurance. WORLD shall
----------------------------------------------------
procure and maintain Aircraft Third Party Aviation Legal Liability insurance
against all risks, including war risks, hijacking and kindred perils in respect
of all operations under this Agreement in an amount not less than USD SIX
HUNDRED MILLION ($600,000,000) for any one occurrence and shall furnish MAS with
certificates containing details of such insurance not later than fourteen (14)
calendar days prior to commencement of the services to be performed by WORLD
under this Agreement. Such insurance shall include the

17
<PAGE>

following provisions:

(a) MAS, its officers, directors, agents, servants and employees
shall be named as additional insureds (the "MAS Additional
Insureds");

(b) acceptance by the insurers of the contractual obligations of
WORLD to the MAS Additional Insureds as set forth in this
Agreement to the extent of coverage afforded under the
policies;

(c) that such insurance shall be primary without any right of
contribution from any insurance carried by the MAS Additional
Insureds;

(d) a standard clause as to cross liability or severability of
interests among parties appearing as MAS Additional Insureds;

(e) the geographic limits, if any, shall be worldwide but in the
case of war risk coverage territory shall be subject to such
excluded territories as is usual and customary in the airline
industry;

(f) that not less than thirty (30) calendar days written notice or
such shorter notice period as shall be available under the war,
hijacking and kindred perils insurance shall be given to MAS
of cancellation by insurers or adverse material alteration or
reduction in the limits of coverage under the policies;

(g) that the interest of the MAS Additional Insureds under such
policies is insured regardless of any breach by WORLD of any

18
<PAGE>

warranties declaration or conditions of the policies.

13.3 MAS Liability Insurance. MAS shall procure and maintain at its expense
public passenger, baggage, cargo, mail, aviation premises, public
liability, and legal liability insurance (including declared values)
against all risks, including war risks, hijacking and kindred perils in
respect of all operations under this Agreement in amounts acceptable to
WORLD being in any case not less than USD SIX HUNDRED MILLION
($600,000,000) (combined single limit) for any one occurrence and shall
furnish WORLD with certificates containing details of such insurance not
later than fourteen (14) calendar days before the commencement of the
lease term. Such insurance shall provide for a waiver of underwriters'
rights of recovery (waiver of subrogation) but only to the extent that
MAS has waived its rights of recovery under this Agreement against WORLD,
or ILFC, their officers, directors, agents, servants and employes. Such
insurance shall include the following provisions:

(a) WORLD, its officers, directors, agents, servants and employees
shall be named as additional insureds ("WORLD Additional Insureds");

(b) Lessor: ILFC, its officers, directors, agents, successors, assigns,
employees shall be named as additional insureds.

(c) acceptance by the insurers of the contractual obligations of MAS to
the WORLD Additional Insureds, directors, agents, servants and
employees as set forth in this Agreement to the extent of coverage
afforded under the policies;

(d) that such insurance shall be primary without any right of
contribution from any insurance carried by the WORLD Additional
Insureds;

<PAGE>

(e) a standard clause as to cross liability or severability of interests
among parties appearing as WORLD Additional Insureds;

(f) the geographic limits, if any, shall include at the minimum all
territories over which the Aircraft will be operated hereunder;

(g) that not less than thirty (30) calendar days written notice or such
shorter notice period as shall be available under the war,
hijacking and kindred perils insurance shall be given to WORLD and
ILFC of cancellation by insurers or adverse material alteration or
reduction in the insured value or reduction in the value of perils
to be insured against;

(h) that the interest of the WORLD Additional Insureds in such policies
is insured regardless of any breach by MAS of any warranties.

13.4. Loss of Insurance. In the event either party should for any reason fail
-----------------
to renew the insurance required to be in effect by the party hereunder
at least thirty (30) calendar days prior to the expiration thereof or
fail to keep any such policy in full force and effect, the other party
shall have the option to pay the premiums on said policy or contract of
insurance or to take out such insurance, with the amount of any such
premiums to be immediately due and payable to the other party, provided,
however, that no exercise by the other party of said option shall in
any way affect its rights and remedies hereunder.

ARTICLE FOURTEEN: INDEMNIFICATION
----------------------------------

<PAGE>

14.1 Indemnification by WORLD. WORLD hereby indemnifies and agrees to hold
------------------------
harmless MAS, its officers, directors, agents, servants and employees from and
against any and all liabilities, claims, demands, suits, judgments, damages,
losses, costs and expenses (including reasonable legal expenses and attorneys'
fees) for or on account of or in any way connected with injury to or death of
any persons (but excluding passengers) whomsoever or loss of or damage to any
property (except baggage, cargo, mail and MAS property) arising out of (i) the
use or the operation of the Aircraft under this Agreement including but not
limited to the Aircraft and its related equipment or (ii) the performance or
nonperformance by WORLD of its responsibilities under this Agreement, unless
such loss or damage arises from the gross negligence or wilful misconduct of
MAS, its officers, directors agents, servants or employees or unless MAS has
indemnified WORLD in respect of such loss, damage, death or injury pursuant to
Article 14.2.

14.2 Indemnification By MAS.
----------------------

(A) MAS hereby indemnifies and agrees to hold harmless WORLD and ILFC,
its officers, directors, agents, servants and employees from and against all
liabilities, claims, demands, suits, judgements, damages, losses, costs and
expenses (including reasonable legal expenses and attorneys' fees) connected
therewith or incident thereto arising out of loss of or damage to any baggage,
cargo, mail or MAS property or delay in delivery of baggage, cargo or mail or
death of or injury to any passenger caused by or arising out of or in any way
connected with (i) this Agreement or the use or the operation of the Aircraft
under this Agreement or (ii) the performance

21
<PAGE>

or nonperformance of MAS's responsibilities under this Agreement,
unless such loss or damage arises from the gross negligence or wilful
misconduct of WORLD, its officers, directors, agents, servants or
employees.

(B) MAS hereby indemnifies and agrees to hold harmless, and shall cause
its agents and subcontractors to indemnify and hold harmless WORLD,
its officers, directors, agents, servants and employees from and
against all liabilities, claims, demands, suits, judgements, damages,
losses, costs and expenses (including reasonable legal expenses and
attorneys' fees) connected therewith or incident thereto arising out
of loss of or damage to the Aircraft in any way connected to the
performance or nonperformance of MAS's responsibilities under this
Agreement, unless such loss or damage arises from the gross negligence
or wilful misconduct of WORLD, its officers, directors, agents,
servants or employees or unless WORLD has indemnified MAS in respect
of such loss or damage pursuant to Article 14.1.

(C) MAS shall make every effort to ensure that the Aircraft is not used by
any other party for unlawful purposes including without limitation
smuggling of contraband articles. MAS hereby indemnifies and agrees to
hold harmless WORLD, its officers, directors, agents, servants and
employees from and against all liabilities, fines, penalties,
assessments, charges, damages, losses, costs and expenses (including
reasonable legal expenses and attorneys' fees) arising out of or in
any way connected to the use of the Aircraft for unlawful purposes
unless WORLD, its officers, directors, agents, servants or employees
perpetrate such unlawful use.

<PAGE>

MAS's liability to WORLD hereunder specifically extends to any loss of use
of the Aircraft.

14.3. Employee Claims. Notwithstanding anything to the contrary set forth in
---------------
this Article Fourteen, each party hereby indemnifies and agrees to hold
harmless the other party, its officers, directors, agents, servants and
employees from and against all liabilities, claims, demands, suits,
judgements, damages, losses, costs and expenses (including reasonable
legal expenses and attorneys' fees) connected therewith or incidental
thereto for death of or injury to any officer, director, agent, servant or
employee of each party (provided such death or injury arises out of and in
the course of such individual's employment by such party) caused by or
arising out of or in any way connected with the use or the operation of
the Aircraft under this Agreement, unless such death or injury arises from
the gross negligence or wilful misconduct of the other party, its
officers, directors, agents, servants or employees.

14.4. Non Consequential Damages. Except as otherwise specifically provided by
-------------------------
this Agreement, neither party shall be liable for consequential damages
under this Agreement.

14.5. Mutual Assistance. Each party agrees to give to the other party all
-----------------
assistance reasonable requested, and to put at its disposal all pertinent
records, to facilitate the prosecution or defense of any claims, suit or
investigations arising out of this Article Fourteen.

ARTICLE FIFTEEN: EARLY TERMINATION

15.1. Grounds For Early Termination. Except as provided under Article
-----------------------------

<PAGE>

16.2 and Article 17.2, neither party shall have the right to terminate this
Agreement prior to the completion of the Term except that WORLD may so terminate
under any of the following circumstances:

(a) Loss of Aircraft. In the event of loss or destruction of the Aircraft,
----------------
or damage to the Aircraft rendering repair impractical or uneconomic,
this Agreement shall be deemed terminated as of the date of such loss,
destruction or damage, provided, however, that if WORLD notifies MAS
-------- -------
within fifteen (15) calendar days after the date of such loss,
destruction or damage that it will continue to make available to MAS
an aircraft having a payload capacity equal to or greater than the
Aircraft's, then this Agreement shall not be deemed terminated. In the
event of any loss, destruction or damage to the Aircraft, MAS shall
fully cooperate with WORLD to facilitate the prosecution or defense of
any claims, suits or investigations. MAS shall not release publicly any
information regarding such loss, destruction or damage without first
consulting with WORLD.

(b) Airlift Emergency. In the event an airlift emergency has been declared
-----------------
by the President of the United States or the Secretary of Defense or
his designee or if the Civil Reserve Air Fleet has been activated by
order of the Secretary of Defense in accordance with WORLD's Military
Airlift Command contract, or if the Aircraft is requisitioned by the
United States in connection with a national emergency, WORLD may
terminate this Agreement.

Aircraft into compliance with any (i) instruction or airworthiness
directive of the FAA, or (ii) mandatory manufacturer service bulletin,
falling due during the Term, is estimated by WORLD to exceed USD FIVE
HUNDRED THOUSAND ($500,000) per Aircraft, WORLD may terminate this
Agreement. However, WORLD will use its best effort to secure for MAS a
substitute aircraft having a payload capacity equal to or greater than
the Aircraft's.

Upon termination of this Agreement under any of the above circumstances, MAS
shall cease to have any rights or remedies in respect of the Aircraft hereunder,
but all such rights and remedies shall be deemed thenceforth to have been waived
and surrendered by MAS, and no payments theretofore made by MAS hereunder shall
give to MAS any cause or right of action at law or in equity in respect of the
Aircraft or the use of operation thereof. No such termination of this Agreement
by WORLD shall be a bar to the recovery by WORLD from MAS of any amounts owed by
MAS under this Agreement, provided, however, that such termination has not
resulted from WORLD's wilful neglect and MAS shall be and remain liable for the
same until such amounts shall have been paid in full. MAS shall also reimburse
WORLD for all costs, including reasonable legal expenses and attorneys' fees,
incurred in connection with (i) the return of the Aircraft to WORLD in the
condition specified in Article 7.7 and (ii) the collection of any monies owed or
thereafter owing to WORLD under this Agreement. Provided however in the event
that WORLD terminates

<PAGE>

this Agreement under circumstances (a) or (c) of the above, WORLD shall
refund to MAS all monies paid in advance prior to such termination
including without limitation the advance rental, in full or pro-rate
amount for services which WORLD did not perform. WORLD's above obligation
shall arise only if such event leading to the termination is caused by
the wilful misconduct or negligence of WORLD, its employees, servants or
agents. In the event that the cause is beyond either party's control, it
is agreed that the amount to be refunded shall be on 50/50 basis of the
full amount or on the pro-rate amount as the case may be.

15.2. Return of Equipment. Under any termination provided for in this Article
-------------------
Fifteen, all equipment owned or leased by one party hereto and in the
possession of the other party shall be returned to the rightful owner in
as good condition as when received, normal wear and tear excepted.

ARTICLE SIXTEEN: DEFAULTS BY MAS
--------------------------------

16.1. Events of Default By MAS. The following events shall constitute Events
------------------------
of Default:

(a) Default by MAS in the making of any payments to WORLD when due
under this Agreement which default shall continue for a period of
five (5) business days or more or

(b) Cancellation by MAS of all or any substantial part of the schedule
set forth in Annex B; or

(c) Expiration, withdrawal, revocation or termination of any
governmental permits, traffic rights, operating authorities or
franchises, or any other authorizations required of MAS; or

<PAGE>

(d) Default by MAS at any time in the procurement or maintenance of any
insurance coverage prescribed herein; or

(e) Default by MAS in the observance or performance of any of the
material covenants, conditions, agreements or warranties on the part
of MAS contained in this Agreement which default shall continue for
a period of fourteen (14) calendar days after written notice from
WORLD to MAS specifying the default and demanding that the same be
remedied; or

(f) If MAS shall file a voluntary petition of bankruptcy or shall admit
in writing its insolvency or bankruptcy, or shall make a general
assignment for the benefit of creditors, or shall consent to the
assignment to a receiver, trustee or liquidator of MAS of all or
substantially all of its property, or shall file a petition or
answer seeking reorganization in a proceeding under any bankruptcy
or insolvency laws as now or hereinafter in effect, or an
involuntary petition in bankruptcy or reorganization shall have been
filed against MAS and shall not have been vacated or discharged
within thirty (30) calendar days from the date of the filing
thereof, or if any order, judgment or decree shall be entered by any
court of competent jurisdiction appointing a receiver, trustee or
liquidator of MAS or of any substantial part of its property and
such order, decree of judgment shall remain in force and shall not
have been dismissed or vacated for a period of thirty (30) calendar
days after the date of entry thereof; or

(g) All or substantially all of the property or assets of MAS shall be
condemned, confiscated, or otherwise appropriated by

<PAGE>

any governmental authority and shall be detained for a period of thirty
(30) consecutive calendar days.

For the purpose of this Article 16.1, "business day" shall mean any day other
than a Saturday or a Sunday or a day on which commercial banking institutions in
Kuala Lumpar are authorized or are obligated to be closed.

16.2 Remedies of WORLD. Upon the occurrence of any of the foregoing Events
-----------------
of Default during the Term of this Agreement, WORLD may, within ten (10)
calendar days after such Event of Default has occurred, terminate this Agreement
by serving written notice upon MAS to that effect, and this Agreement shall
thereupon terminate immediately. Upon service of such notice, WORLD may return
the Aircraft to such location as WORLD may choose, free and clear of its
obligation hereunder. Upon service of such notice, MAS shall cease to have any
rights or remedies in respect of the Aircraft hereunder, but all such rights and
remedies shall be deemed thenceforth to have been waived and surrendered by MAS,
and no payments theretofore made by MAS hereunder shall give to MAS any cause or
right of action at law or in equity in respect of the Aircraft or the use or
operation thereof. No such termination of this Agreement by WORLD shall be a bar
to the recovery by WORLD from MAS of any amounts owed by MAS under this
Agreement, and MAS shall be and remain liable for the same until such amounts
shall have been paid in full. MAS shall also reimburse WORLD for all costs,
including reasonable legal expenses and attorneys' fees, incurred in connection
with (i) the return of the Aircraft to such locations as WORLD may choose, (ii)
the return of the Aircraft to WORLD in the condition specified in Article 7.7
and (iii) the collection of any monies owed or thereafter owing to WORLD under
this Agreement.

28
<PAGE>

16.3. Interest on Monies Owed. With regard to sums which may become
-----------------------
due and payable under this Article Sixteen, but are not paid when due,
such sums shall bear interest at the rate of ten percent (10%) per annum
or the maximum rate allowable by law, whichever is lower, on any portion
thereof overdue; and WORLD shall be entitled to recover judgement for the
total amount due from MAS, including such interest, and any costs of
collection incurred by WORLD, including reasonable legal expenses and
attorneys' fees.

ARTICLE SEVENTEEN: DEFAULTS BY WORLD
------------------------------------

17.1. Events of Default By WORLD. The following events shall constitute
--------------------------
Events of Default by WORLD:

(a) Default by WORLD in the making of any payments to MAS when due under
this Agreement which default shall continue for a period of five (5)
calendar days or more; or

(b) Default by WORLD at any time in the procurement or maintenance of
any insurance coverage prescribed herein; or

(c) Default by WORLD in the observance or performance of any of the
material covenants, conditions, agreements or warranties on the part
of WORLD contained in this Agreement, which default shall continue
for a period of fourteen (14) calendar days after written notice
from MAS to WORLD specifying the default and demanding that the same
to remedied; or

(d) If WORLD shall file a voluntary petition of bankruptcy or shall
admit in writing its insolvency or bankruptcy, or shall make a
general assignment for the benefit of creditors, or

<PAGE>

shall consent to the assignment to a receiver, trustee or liquidator
of WORLD of all or substantially all of its property, or shall file
a petition or answer seeking reorganization in a proceeding under
any bankruptcy or insolvency laws as now or hereinafter in effect,
or an involuntary petition in bankruptcy or reorganization shall
have been filed against WORLD and shall not have been vacated or
discharged within thirty (30) calendar days from the date of the
filing thereof; or if an order, judgment or decree shall be entered
by any court of competent jurisdiction appointing a receiver,
trustee, or liquidator of WORLD or of any substantial part of its
property and such order, decree or judgment shall remain in force
and shall not have been dismissed or vacated for a period of thirty
(30) calendar days after the date of entry thereof; or

(e) All or substantially all of the property or assets of WORLD shall be
condemned, confiscated, or otherwise appropriated by any
governmental authority and shall be detained for a period of thirty
(30) consecutive calendar days, except in cases involving a
------
commitment of the Aircraft, or any of WORLD's aircraft, in an
airlift emergency as determined by the President of the United
States or the Secretary of Defense of his designee or as described
in Section 15.1(b).

17.2. Remedies of MAS. Upon the occurrence of any of the foregoing Events of
---------------
Default during the Term of this Agreement, MAS may, at its election,
within ten (10) calendar days thereafter, terminate this Agreement by
serving written notice upon WORLD to that effect and this Agreement shall
thereupon terminate immediately. Upon service of such notice, WORLD shall
refund to MAS all monies paid in advance

30
<PAGE>

prior to such termination including without limitation the advance rental
in full or pro-rate amount. No such termination of this Agreement by MAS
shall be a bar to the recovery by MAS from WORLD of any amounts owed by
WORLD under this Agreement, and WORLD shall be and remain liable for the
same until such amounts shall have been paid in full. WORLD shall also
reimburse MAS for all costs, including reasonable legal expenses and
attorneys fees incurred in connection with the collection of any monies
owed of there after owing to MAS under this Agreement.

17.3 Interest On Monies Owed. With regard to sums which may become due and
------------------------
payable under this Article Seventeen, but are not paid when due, such
sums shall bear interest at the rate of ten percent (10%) per annum or
the maximum rate allowable by law, whichever is lower, on any portion
thereof overdue; and MAS shall be entitled to recover judgement for the
total amount due from WORLD, including such interest, and any costs of
collection incurred by MAS, including reasonable legal expenses and
attorneys' fees.

ARTICLE EIGHTEEN: APPLICABLE LAW; DISPUTES
-------------------------------------------

18.1. Governing Law. This Agreement shall be construed and performance hereof
-------------
determined in accordance with the law of England, including all matters
of construction, validity and performance.

18.2 Arbitration.
-----------
a. The Parties shall first use their best endeavors to resolve, through
mutual consultation or a meeting of the Chief Executive Officers of
the parties hereof without involving any

31
<PAGE>

third party or parties, any disputes which may arise under, out of or
in connection with or in relation to this Agreement.

ARTICLE NINETEEN: ASSIGNMENT
----------------------------

19.1 Assignment By WORLD. Neither party shall assign this Agreement, or any
-------------------
rights or obligations hereunder, in whole or part, to any other person
without the prior written consent of the other party, except that (i) WORLD
or MAS may assign this Agreement or any of its rights and obligations
hereunder to wholly owned subsidiary or other affiliate of WorldCorp, Inc.
or MAS as the case may be, or its or their successors and (ii) WORLD may
freely assign its interest in any monies due or to become due from MAS
hereunder. Any assignment in contravention of the terms hereof shall be
null and void.

ARTICLE TWENTY: MISCELLANEOUS PROVISIONS
----------------------------------------

20.1 Headings. The headings of the Articles and Sections hereto are inserted
--------
for convenience only and shall not govern the meaning of construction of
any of the provisions hereof.

20.2 Counterparts. This Agreement may be executed in two or more counterparts,
------------
each such counterpart constituting an original hereof

20.3 Enforceability of Provisions. No delay or omission in the exercise of any
----------------------------
power or remedy herein provided or otherwise available to WORLD or MAS
shall impair or affect such party's right thereafter to

-32-
<PAGE>

exercise the same. Any extension of time for payment hereunder or other
waiver or indulgence granted to MAS in any particular instance shall not
alter or affect WORLD'S rights or the obligations of MAS hereunder in any
other or future instance. WORLD'S acceptance of any payment after it shall
have become due hereunder shall not be deemed to alter or effect the
obligations of MAS or WORLD'S rights hereunder with respect to any
subsequent payment.

20.4 Notices and Communications. All notices and communications to be given
--------------------------
pursuant to this Agreement shall be in writing and shall be delivered to or
served upon the parties in person or by telegram, telex, telefax, SITA or
by registered mail, return receipt requested, addressed as follows:

WORLD AIRWAYS, INC.
13873 Park Center Road
Suite 400
Herndon, VA 22071
Attention: Executive Vice President
SITA: IADSSWO
FAX: (703) 834-9412

Vice President - Cargo
SITA: IADFWWO
FAX: (703) 834-9476

MAS:

Cargo Centre,
Subang-Kuala Lumpur Int'l. Airport
47200 SUBANG,
Malaysia
Attention: Cargo Director
SITA: KULDQMH
FAX: 03-746-4553

or at such other addresses of any party hereto or any other party as such party
shall designate in a written notice served as hereinabove provided. The
effective date of any notice or request given in connection with this Agreement
shall be the date on which it is received by the addressee. All communications
involving operational matters arising under this Agreement

33
<PAGE>

shall be sent to:

WORLD: Operations Control SITA: IADOPWO
FAX: 703-834-9373/9204
MAS: Flight Control SITA: KULWWMH
FAX: 03-746-2850

ARTICLE TWENTY-ONE: OPERATIONAL HANDBOOK
----------------------------------------

21.1 Operational Handbook. The parties agree to mutually draft, as soon as
--------------------
possible, a MAS/WORLD Operational Handbook for the purpose of detailing the
operational procedures governing the day-to-day actions of both parties in
respect of the performance of services under this Agreement. Failure of the
parties to compile the Operational Handbook shall not affect any of their
other responsibilities and obligations under this Agreement. In the event
of any conflict between the Operational Handbook and the provisions of this
Agreement, the provisions of this Agreement shall govern.

ARTICLE TWENTY-TWO: COMPLETE AGREEMENT; INTERPRETATION
------------------------------------------------------

22.1 Prior Agreements Superseded. Upon execution, this Agreement shall supersede
---------------------------
all previous Agreements and understandings respecting the provision of
freighter services to MAS by WORLD.

22.2 Interpretation. This Agreement constitutes the entire contract between MAS
--------------
and WORLD and shall not be varied, contradicted, explained or supplemented
by any oral agreement or representation, by course of dealing or
performance or by usage of trade, or amended or changed in any other manner
except by an instrument in writing of even or subsequent date hereto,
executed by both parties by their duly authorized representatives.

-34-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on behalf of their respective officers thereunto
duly authorized, as of the day and year first above written.

FOR AND ON BEHALF OF: FOR AND ON BEHALF OF:

WORLD AIRWAYS, INC. MALAYSIAN AIRLINE SYSTEM BERHAD

By: By:
----------------------- -----------------------
Name: Ahmad M. Khatib Name: Baharudin Ngah

Title: Executive Vice President Title: Cargo Director

<PAGE>

ANNEX A-1
PAGE 1 OF 2

AIRCRAFT #1
-----------

MD-11F AIRCRAFT SPECIFICATIONS
------------------------------

AIRCRAFT: McDonnell Douglas MD-11-F

SERIAL NUMBER: 48633

REGISTRATION: 274WA

ENGINES: PW4462 Serial Numbers: P733747
P733748
P733749

WEIGHTS AND STRUCTURAL DATA (LBS.):

- MTOW 625,500
- MLW 471,500
- MZFW 451,300
- FUEL CAPACITY 258,727 @ 6.7 lb. per U.S. Gallon
- OEW 251,371

MAINTENANCE PROGRAM:

- A-Check: 400 Flight Hour Interval
- B-Check: None " " "
- C-Check (half): 2,100 " " "
- D-Check: None " " "

UNIT LOAD DEVICE/VOLUME CAPACITY:

Main Deck;
26 each 88" X 125" footprint
or 26 each 96" X 125" "

Forward Lower Compartment;

6 each 88" X 125" footprint
or 6 each 96" X 125" footprint
or 9 each 60.4" X 125" footprint
or 18 each LD-3 Type Containers

Center Lower Compartment;*

7 each 60.4" X 125" footprint
or 14 each LD-3 Type Containers

* The on board Fly-A-Kit occupies the space (footprint) of
two (2) 60.4" X 125" units of four (4) LD-3 Type
Containers.
Therefore the net available space for commercial cargo
is;

5 each 60.4" X 125" units
or 10 each LD-3 Type Containers

36
<PAGE>

AFT Lower Compartment:

This is a "bulk" compartment, no unit load devices are loaded
in this compartment.

The total volume of the compartment is;

- 510 cubic feet
or - 14.4 cubic meters

CARGO DOOR OPENINGS:

- Main Door Main Deck 140" W x 102" H
- Forward Door Lower Deck 104" W x 66" H
- Center Door Lower Deck 70" W x 66" H
- Aft Door Lower Deck 30" W x 36" H

37
<PAGE>

AIRCRAFT #2 ANNEX A-2
-----------

MD-11CF AIRCRAFT SPECIFICATIONS
-------------------------------

To be delivered on or after February 1, 1995
or
on or about June 20, 1995

AIRCRAFT: McDonnell Douglas MD-11-CF

SERIAL NUMBER: 48631 OR 48632

REGISTRATION: 275WA OR 276WA

ENGINES: PW 4462

WEIGHTS AND STRUCTURAL DATE (LBS.):

- MTOW 625,500
- MLW 471,500
- MZFW 451,300
- FUEL CAPACITY 258,727 @ 6.7 lb. per U.S. Gallon
- OEW (TO BE ADVISED)

MAINTENANCE PROGRAM:

- Same as MD-11F A/C 274WA

UNITE LOAD DEVICE/VOLUME CAPACITY:

- Same as MD-11F A/C 274WA

CARGO DOOR OPENINGS:

- Same as MD-11F A/C 274WA

<PAGE>

ANNEX B
PAGE 1 OF 2

FLIGHT SCHEDULE/PAYLOAD
-----------------------

FLIGHT SCHEDULE
---------------

All times are stated in Universal Time Coordinated (UTC).

Day Departure Day Arrival
--- --------- --- -------
7 LAX 0630 7 ANC 1145
7 ANC 1315 7 TPE 2345
1 TPE 0115 1 PEN 0545
1 PEN 0715 1 KUL 0815
1 KUL 1115 1 KHI 1715
1 KHI 1845 1 DXB 2105
1 DXB 2235 2 AMS 0650
3 AMS 1050 3 DXB 1815
3 DXB 1945 4 PEN 0230
4 PEN 0400 4 KUL 0500
4 KUL 1035 4 DXB 1735
4 DXB 1905 5 AMS 0320
5 AMS 0620 5 DXB 1345
5 DXB 1515 5 KUL 2230
6 KUL 0130 6 PEN 0230
6 PEN 0400 6 TPE 0830
6 TPE 1000 6 ANC 1900
6 ANC 2030 7 LAX 0140

AIRCRAFT OUT OF SERVICE PERIODS:
-------------------------------

With mutual agreement of both MAS and WORLD the aircraft will not
operate the above schedule during the following periods.

A-- Sunday, December 11th, 1994 thru Saturday, December 24th, 1994
and for each two week period preceding December 25th each
year, if requested by WORLD with 60 days prior notice.

SCHEDULED MAINTENANCE:
---------------------

The above schedule is subject to the FAA approved maintenance schedule for
the Aircraft and WORLD shall bear no liability for periods when the
Aircraft is out of service due to the accomplishment of scheduled
maintenance. World shall exercise it best efforts to plan the
accomplishment of scheduled maintenance for the Aircraft so as to, to the
maximum extent possible, avoid disruptions to the above flight schedule and
shall notify MAS thirty (30) days in advance of such scheduled maintenance
for the Aircraft.

39
<PAGE>

ANNEX B
PAGE 2 OF 2

PAYLOAD
-------

WEIGHT:
-------

The MD-11F aircraft will be in a configuration, which according to
McDonnell Douglas data, is capable of accommodating a maximum payload
of 193,600 lbs (87,800 kgs.) gross payload. The actual payload for
any given sector will be determined by the sector's block hours, time
of year, airport limitations, and the prevailing weather conditions
at time of operation.

VOLUME:
-------

According to McDonnell Douglas data, the MD-11F's aircraft's total
volumetric capacity is 21,627 Cu Ft or 604.0 Cu M. The actual usable
volume will depend on the type of unit load devices (ULDs) used.

<PAGE>

ANNEX B-1

REQUIRED SURCHARGE FOR
----------------------
BLOCK HOURS PER CYCLE LESS THAN 4.00
------------------------------------

In accordance with Article 4.4, the block hour surcharge to be assessed to MAS
is as follows:

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------
BLOCK 4.00 3.90 3.80 3.70 3.60 3.50 3.40 3.30 3.20 3.10 3.00
HOURS/CYCLE
-----------------------------------------------------------------------------------------------------
BLOCK HOUR 10.13 20.81 32.03 43.97 56.45 69.84 83.77 98.79 114.71 131.72
SURCHARGE
-----------------------------------------------------------------------------------------------------
</TABLE>

41
<PAGE>

ANNEX C-1
PAGE 1 OF 3

WORLD SPARE PARTS AND ENGINEERING SUPPORT

1. AIRCRAFT ROTABLE SPARES SUPPORT
-------------------------------

1.1 The Aircraft will be equipped with a standard and extended flyaway
kit. Attached flyaway kit list will be provided to ASU
Superintendent/Maintenance, Maintenance Controllers/Base Maintenance
Superintendent/Engineering Suppliers Manager/Line Maintenance
Superintendent-KUL.

1.2 Loans of spares from MAS will be free of charge for up to seven days.
Loan of spares will be rechargeable to WORLD from the eighth day as
tabulated below:

- 0 - 7th day - free of charge
- 8th - 10th day - 1/2% per day
- 11th day and thereafter - 1% per day
- Administrative, availability and handling fees - free of
charge.
- Basis is MAS's acquisition cost.
- Maximum loan fee will be MAS's replacement cost.
- WORLD to have the option to either pay premium loan fees for
MAS parts that may leave with the Aircraft until parts are
returned, or purchase the part installed on the Aircraft
(subject to agreement by MAS) at MAS's replacement cost.

For the purpose of this paragraph 1.3, "day" shall mean each
twenty-four (24) hour period from the time the loaned spare is
delivered to WORLD for the installation on the Aircraft.

1.3 Loan charges for the spare parts borrowed by MAS from MAS' pooling
partners or Vendors to support the operation for the Aircraft in the
Agreement shall be WORLD's account and shall be reimbursed to MAS by
WORLD at MAS cost.

1.4 WORLD Engineers are required to liaise with MAS Maintenance Control
Center for request of loans.

1.5 WORLD spares destined for KUL must be addressed WORLD Airways Inc.
C/O MAS Berhad, eng. Product Support Dept., SUGANG Int'l. Airport,
47200 SUBANG, Selangor, Malaysia. Attn: Herbert Yim, Phone
(60-3-7462296/7461078.

1.6 For ease of custom clearance, each consignment should be limited to a
maximum of 25 items, except initial positioning of spares support.

1.7 WORLD spare will be held in MAS Engineering stores. WORLD Engineers
will have full access to the WORLD storage area and may pick up
spares from stores directly or request by walkie talkie through MCC
or ASU Progress Chaser.

1.8 Customs formalities and storage of spares will be at MAS expense.

42
<PAGE>

ANNEX C-1
PAGE 2 OF 3

1.9 MAS Superintendent of Engineering Supplies will arrange to provide,
subject to availability, one forklift for WORLD Stores personnel's
use in central Stores and Line Maintenance Hangar.

2. CONSUMABLE
----------

2.1 Engine oil 2380 and Hydraulic Fluid Skydrol 500B4 will be at MAS's
expenses.

2.2 Consumable available at free issue stores will be at MAS's expense.

3. STORAGE FACILITIES
------------------

During the Term, MAS shall provide WORLD free of charge suitable storage
space at Subang International Airport for spare parts and engines.

4. 4.1 APU AND PW4462 ENGINE SUPPORT
-----------------------------

WORLD will position at KUL one spare P & W 4462 engine and engine
change equipment.

4.2 In the event of an engine change requirement, the Aircraft will be
"two engine ferried" to KUL at WORLD's cost for an engine change.

4.3 WORLD will have a two engine ferry crew available.

4.4 In the event that no engine or engine change equipment is available
in KUL, SEL, OR ZRH, a P & W pool engine at the nearest location will
be utilized and the Aircraft will be "two engine ferried" to that
location at WORLD cost for the engine change and redelivery to a
mutually agreed location.

5. WORLD ENGINEERING SUPPORT PERSONNEL
-----------------------------------

5.1 WORLD Engineering will be provided with a van for their movement
within Subang Airport. DCA driving permit required. MAS will assist
WORLD Engineering to obtain permits.

5.2 WORLD Engineering are welcome to use the MAS Engineer break/rest-room
and facilities. There is one rest room in the MAS hangar and one in
ASU at the transfer corridor facing bay 12 Subang Airport. Same
applies in all other Malaysian stations.

5.3 Reasonable office space will be provided to WORLD Maintenance
Manager.

5.4 WORLD engineers are encouraged must discuss administrative or
technical matters requiring urgent attention with MAS Duty
Engineering or MAS MCC.

47
<PAGE>

ANNEX C-1
PAGE 3 OF 3

5.5 All WORLD Engineers are required to obtain Airport passes for KUL, PEN and
all other stations as may be required. Two passport size photo are required.
MAS will assist in obtaining airport passes.

44
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CHAPTER 21 - AIR CONDITIONING
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1 EA SELECTER ASSY CABIN 2119704-1 LD5 / 3-1
--------------------------------------------------------------------------------
1 EA FAN ASSY AVION. COOLING 29680 LD5 / 6-2
--------------------------------------------------------------------------------
1 EA CONT. ASSY ENV SYS 4059023-903 LD5 / 9-1
--------------------------------------------------------------------------------
3 EA COALESCER BAGS 187942-1 AFT / 4-1
--------------------------------------------------------------------------------
CHAPTER 22 - AUTO FLIGHT
--------------------------------------------------------------------------------
1 EA COMP/FLY CTL AUTO 4059001-904 AFT / 6-1
--------------------------------------------------------------------------------
1 EA GLARESHIELD CTL PNL ASSY 4059002-903 LD5 / 8-2
--------------------------------------------------------------------------------
CHAPTER 23 - COMMUNICATIONS
--------------------------------------------------------------------------------
1 EA SWITCH F20027 LD5 / 7-2
--------------------------------------------------------------------------------
1 EA TRANS. HFS 700 HF/COMM 622-5272-020 LD5 / 5-2
--------------------------------------------------------------------------------
1 EA PA AMP 622-5342-001 LD5 / 14-3
--------------------------------------------------------------------------------
1 EA HANDSET 63274-011 LD5 / 8-3
--------------------------------------------------------------------------------
1 EA HANDMIC 63999-003 LD5 / 8-3
--------------------------------------------------------------------------------
1 EA HF/ANTANNA COUPLER 792-6140-001 LD5 / 5-3
--------------------------------------------------------------------------------
1 EA PRE-AMP PAX ADDRESS G6107B LD5 / 8-3
--------------------------------------------------------------------------------
1 EA MGMT UNIT ASSY AUDIO G6980-01 LD5 / 8-3
--------------------------------------------------------------------------------
1 EA PANAL ASSY AUDIO G6981-02 LD5 / 8-3
--------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
--------------------------------------------------------------------------------
1 EA JACK PANAL G6982-01 LD5 / 8-3
--------------------------------------------------------------------------------
CHAPTER 24 - ELECTRICAL POWER
--------------------------------------------------------------------------------
1 EA PANAL ELEC SYS CONTROL 4059031-901 LD5 / 7-2
--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------
1EA PANAL ELECT SYS CONTROL 5D0245-150 LD5 / 7-2
--------------------------------------------------------------------------------
1EA CONTROL POWER REMOTE 750864c LD5 / 7-2
--------------------------------------------------------------------------------
1EA CONTROL UNIT G.C.U. 750866c LD5 / 14-5
--------------------------------------------------------------------------------
1EA BUS TIE RELAY 943D206-4/5 LD5 / 1-3
--------------------------------------------------------------------------------
1EA G.C.U. 976J862-17 LD5 / 10-2
--------------------------------------------------------------------------------
1EA A/C POWER CONTRACTOR B429C LD5 / 14-3
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM600BA40N24 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM600BA5N22 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM600BA60A23 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER 5D0001-3/8500-005-3 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM600BA60N22 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM601BA10A22 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM601BA20A22 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CIRCUIT BREAKER SM601BA60A22 LD5 / 13-1
--------------------------------------------------------------------------------
1EA EMERGENCY PWR RELAY 5D0124-1 LD5 / 13-1
--------------------------------------------------------------------------------
1EA CALL LIGHT CIR/BREAKER 9500-001-5/S00475K5 LD5 / 13-1
--------------------------------------------------------------------------------
CHAPTER 25 - EQUIPMENT & FURNISHINGS
--------------------------------------------------------------------------------
CHAPTER 26 - FIRE PROTECTION
--------------------------------------------------------------------------------
1EA LAV SMOKE DETECTOR 72-130001-012 LD5 / 13-1
--------------------------------------------------------------------------------
1EA ENGINE FIRE DETECT UNIT 8038-02-03 md-11F ONLY LD5 / 10-6
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--------------------------------------------------------------------------------
2EA FIRE CONTAINER 895684-1-1 LD3 / 1-1
--------------------------------------------------------------------------------
1EA FIRE EXT LAV A825100-4/A800100-1 LD5 / 7-2
--------------------------------------------------------------------------------
CHAPTER 27 - FLIGHT CONTROLS
--------------------------------------------------------------------------------
1EA SENSOR - SLAT POS 8-614-01 LD5 / 13-1
--------------------------------------------------------------------------------
1EA SENSOR - SLAT POS 8-621-01 LD5 / 13-1
--------------------------------------------------------------------------------
1EA FLAP POS TRANSMITTER 9601-02-11 LD5 / 1-2
--------------------------------------------------------------------------------
1EA O/B FLAP POS TRANSMITTER 9601-02-13 LD5 / 1-2
--------------------------------------------------------------------------------
1EA TRANSMITTER H510A/4004-01 LD5 / 7-2
--------------------------------------------------------------------------------
1EA A.O.A. SENSOR 2568A13 LD5 / 1-3
--------------------------------------------------------------------------------
CHAPTER 28 - FUEL
--------------------------------------------------------------------------------
1EA AUX PWR UNIT START PUMP 218387 LD5 / 6-1
--------------------------------------------------------------------------------
1EA DATA CONTROL UNIT 360-112-004 LD5 / 5-1
--------------------------------------------------------------------------------
1EA MODULE 367-040-081 AFT / 3-1
--------------------------------------------------------------------------------
1EA FUEL CONTROL PANAL 4059024-901 LD5 / 13-2
--------------------------------------------------------------------------------
1EA FUEL SYS CONTROLLER 4059025-905 LD5 / 2-2
--------------------------------------------------------------------------------
1EA FUEL SYS CONTROL PANAL 4059026-902 LD5 / 4-3
--------------------------------------------------------------------------------
1EA FUEL BOOST PUMP 60-847-3 LD5 / 13-1
--------------------------------------------------------------------------------
CHAPTER 29 - HYDRAULIC POWER
--------------------------------------------------------------------------------
6EA HYDRAULIC FILTER 7554649/AC9279FT LD5 / 13-1
--------------------------------------------------------------------------------
1EA HYD SYS CONTROLLER 4059021-902 LD5 / 2-1
--------------------------------------------------------------------------------
1EA PUMP 65066-06 LD5/ 6-1
--------------------------------------------------------------------------------
47

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1EA HYDRAULIC HOSE KIT KIT-HYDMO11 AFT-BULK
--------------------------------------------------------------------------------
1EA BY-PASS VALVE ASSY 240705-2 LD5 / 6-1
--------------------------------------------------------------------------------
CHAPTER 30 - ICE & RAIN
--------------------------------------------------------------------------------
1EA MOTOR L/H 2313M481-1 LD5 / 6-1
--------------------------------------------------------------------------------
1EA MOTOR R/H 2313M481-2 LD5 / 6-1
--------------------------------------------------------------------------------
1EA ANTI-ICE VALVE 3213888-3 LD5 / 11-3
--------------------------------------------------------------------------------
1EA SHUT OFF VALVE 3290278-1 LD5 / 11-3
--------------------------------------------------------------------------------
2EA WIPER BLADES XW23143-1/2315M-88-1 AFT / 4-1
--------------------------------------------------------------------------------
1EA WINDSHIELD A/I CONTROL SYL251767 LD5 / 4-2
--------------------------------------------------------------------------------
CHAPTER 31 - INSTRUMENTS
--------------------------------------------------------------------------------
1EA CHRONOMETER 2610-11-1 LD5 / 1-3
--------------------------------------------------------------------------------
1EA DISPLAY UNIT ELECTRICAL 4059010-901 LD5 / 1-1
--------------------------------------------------------------------------------
1EA DISPLAY UNIT ELECTRICAL 4059011-907 LD5 / 4-1
--------------------------------------------------------------------------------
1EA MISC. SYSTEM CONTROL 4059027-904 LD5 / 2-3
--------------------------------------------------------------------------------
2EA ELECTRIC PROX. UNIT 6-598-03 LD5 / 14-4
--------------------------------------------------------------------------------
1EA CTL AURIAL WARN/UNIT H05A0035-52 LD5 / 1-3
--------------------------------------------------------------------------------
CHAPTER 32 - LANDING GEAR
--------------------------------------------------------------------------------
2EA MAIN WHEEL ASSY 2609471-2 LD3
--------------------------------------------------------------------------------
1EA BRAKE ASSY 2609472-3 LD3
--------------------------------------------------------------------------------
2EA NOSE WHEEL ASSY 5000918-2 LD3
--------------------------------------------------------------------------------
1EA CONTROL BOX 6005304-2 LD5 / 11-2
--------------------------------------------------------------------------------
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CHAPTER 32 - LANDING GEAR CONTINUED
------------------------------------------------------------------------------------------------------------------------------------
1EA AXLE NUT. NOSE LDG GEAR ACG7219-503 LD5 / 13-3
------------------------------------------------------------------------------------------------------------------------------------
1EA SPACER ASSY ACG7220-1 LD5 / 13-3
------------------------------------------------------------------------------------------------------------------------------------
5EA GEAR PINS AXG7000-501 / AXG7012-501 LD5 / 13-1
------------------------------------------------------------------------------------------------------------------------------------
2EA AXEL WASHER CLG AYG7440-1 LD5 / 13-3
------------------------------------------------------------------------------------------------------------------------------------
1EA SPACER M.L.G. ARG7345-501 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
1EA TRANSDUCER WHEEL SPEED 6005305 LD5 / 1-2
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 33 - LIGHTS
------------------------------------------------------------------------------------------------------------------------------------
6EA LAMP MODULE C105606-203 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
1EA N.L.G. LIGHTS 4557 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
1EA STROBE LIGHT RED 2LA03968-40 LD5 / 4-2
------------------------------------------------------------------------------------------------------------------------------------
1EA STROBE LIGHT ENERGY BOX SES003761-00 LD5 / 4-2
------------------------------------------------------------------------------------------------------------------------------------
1EA HIGH INTENSITY LIGHT ASSY AG1013AA02 LD5 / 10-5
------------------------------------------------------------------------------------------------------------------------------------
1EA POWER SUPPLY 60-4411-3 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
1EA ANNUNCIATOR CTL PANAL HG5A0040-1 LD5 / 10-3
------------------------------------------------------------------------------------------------------------------------------------
1EA LIGHT Q4559X AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
2EA LIGHT LOGO Q4597 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
3EA LIGHT Q4681 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
1EA TIMER RG1007AA03 LD5 / 10-6
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 34 - NAVIGATION
------------------------------------------------------------------------------------------------------------------------------------
1EA FLIGHT MGT COMPUTER 4059050-905 LD5 / 3-1
------------------------------------------------------------------------------------------------------------------------------------
1EA MULTIFUNCTION CTL DISPLAY 4059051-902 LD5 / 10-1
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

49
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--------------------------------------------------------------------------------------------------------------------------------
1EA DIGITAL AIR DATA COMPUTER 4059060-901 LD5 / 1-4
--------------------------------------------------------------------------------------------------------------------------------
1EA STANDBY ATT. INDICATOR 501-1558-01 LD5 / 4-3
--------------------------------------------------------------------------------------------------------------------------------
1EA RADIO ALT. RECEIVER 622-4542-221 LD5 / 9-2
--------------------------------------------------------------------------------------------------------------------------------
1EA ANNTENNA PEDESTAL 622-5136-001 LD5 / 9-2
--------------------------------------------------------------------------------------------------------------------------------
1EA VISUAL OMNI RANGE BEACON 622-5220-020 LD5 / 7-3
--------------------------------------------------------------------------------------------------------------------------------
1EA INST. LANDING SYS RECEIVER 622-9738-220 LD5 / 14-3
--------------------------------------------------------------------------------------------------------------------------------
1EA GROUND PROX. WARN UNIT 965-0676-020 LD5 / 11-1
--------------------------------------------------------------------------------------------------------------------------------
1EA ALT / AIR SPEED INDICATOR WL101AMSS LD5 / 10-6
--------------------------------------------------------------------------------------------------------------------------------
1EA PITOT TUBE 651DK AFT / 4-1
--------------------------------------------------------------------------------------------------------------------------------
CHAPTER 35 - OXYGEN
--------------------------------------------------------------------------------------------------------------------------------
1EA MASK OXYGEN MC10-32-101 LD5 / 1-2
--------------------------------------------------------------------------------------------------------------------------------
1EA INDICATOR CREW OXYGEN 523298 LD5 / 4-3
--------------------------------------------------------------------------------------------------------------------------------
1EA P. B. E. 119003 AFT / 4-1
--------------------------------------------------------------------------------------------------------------------------------
CHAPTER 36 - PNEUMATIC
--------------------------------------------------------------------------------------------------------------------------------
1EA LOW PRESS BLEED VALVE 3202176-3 LD5 / 11-3
--------------------------------------------------------------------------------------------------------------------------------
1EA HIGH PRESS VALVE 3290272-3 LD5 / 11-3
--------------------------------------------------------------------------------------------------------------------------------
1EA PNEUMATIC PRESS VALVE 3290280-3 LD5 / 11-3
--------------------------------------------------------------------------------------------------------------------------------
1EA PITOT BLEED VALVE 3399046-1 LD5 / 11-3
--------------------------------------------------------------------------------------------------------------------------------
CHAPTER 49 - AIRBORNE AUX POWER
--------------------------------------------------------------------------------------------------------------------------------
1EA ELECTRIC A.P.U. CTL UNIT 2118700-6 LD5 / 14-1
--------------------------------------------------------------------------------------------------------------------------------
1EA SENSOR ASSY 3603756-2 / 3601170-6 LD5 / 4-3
--------------------------------------------------------------------------------------------------------------------------------
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CHAPTER 49 - AIRBORNE AUX POWER CONTINUED
------------------------------------------------------------------------------------------------------------------------------------
1EA IGNITION UNIT 969690-2 LD5 / 1-3
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 52 - DOORS
------------------------------------------------------------------------------------------------------------------------------------
1EA LATCH ACTUATOR 6026D0001-01 AFT / 1-1
------------------------------------------------------------------------------------------------------------------------------------
1EA ACTUATOR ASSY 630500-07 AFT / 1-1
------------------------------------------------------------------------------------------------------------------------------------
1EA CETER CARGO DOOR ACT. 6305-J0001-01 AFT / 1-1
------------------------------------------------------------------------------------------------------------------------------------
2EA SWITCH H20-14B LD5 / 7-2
------------------------------------------------------------------------------------------------------------------------------------
2EA SWITCH H20-19B LD5 / 7-2
------------------------------------------------------------------------------------------------------------------------------------
2EA SWITCH H20-24B / H20-1 LD5 / 7-2
------------------------------------------------------------------------------------------------------------------------------------
2EA SWITCH H20-26B LD5 / 7-2
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 73 - ENGINE FUEL & CONTROL
------------------------------------------------------------------------------------------------------------------------------------
1EA PROBE 154ED LD5 / 3-1
------------------------------------------------------------------------------------------------------------------------------------
1EA TRANSMITTER 418-05124 LD5 / 14-6
------------------------------------------------------------------------------------------------------------------------------------
1EA ELEC. ENGINE CONTROL 791100-6-075 AFT / 2-1
------------------------------------------------------------------------------------------------------------------------------------
1EA TRANSDUCER 51A020 LD5 / 14-6
------------------------------------------------------------------------------------------------------------------------------------
1EA PUMP 722100 / 625500 AFT / 5-1
------------------------------------------------------------------------------------------------------------------------------------
1EA FUEL MANAGEMENT UNIT 801000-2 LD5 / 10-5
------------------------------------------------------------------------------------------------------------------------------------
1EA FUEL FLOW TRANSMITTER 9-217-30 LD5 / 6-1
------------------------------------------------------------------------------------------------------------------------------------
ACB093F2480Y12 / 218371
------------------------------------------------------------------------------------------------------------------------------------
2EA FILTER 7591299-102 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------

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CHAPTER 74 - ENGINE IGNITION
------------------------------------------------------------------------------------------------------------------------------------
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2EA EXCITER 44933 / 10-621630-1 LD5 / 3-1
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 74 - ENGINE IGNITION CONTINUED
------------------------------------------------------------------------------------------------------------------------------------
2EA CABLE 10-609660-3 AFT / 1-1
------------------------------------------------------------------------------------------------------------------------------------
2EA IGNITER AA134ST LD5 / 14-6
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 77 - ENGINE INDICATING
------------------------------------------------------------------------------------------------------------------------------------
2EA PROSE 50P046 / SOP374-01 LD5 / 7-1
------------------------------------------------------------------------------------------------------------------------------------
1EA THERMOCOUPLER 50P109 / HAD18540 LD5 / 7-1
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 79 - ENGINE OIL
------------------------------------------------------------------------------------------------------------------------------------
2EA FILTERS 764073 / 7584655 AFT / 4-1
------------------------------------------------------------------------------------------------------------------------------------
CHAPTER 80 - ENGINE STARTING
------------------------------------------------------------------------------------------------------------------------------------
1EA STARTER 774860A3 / 774660A1 AFT / 7-1
------------------------------------------------------------------------------------------------------------------------------------
TOOLS AND OILS
------------------------------------------------------------------------------------------------------------------------------------
1EA TIRE GUAGE 1064 / 8844 L-1 CLOSET
------------------------------------------------------------------------------------------------------------------------------------
1EA OIL SERVICE BOTTLE 2315 / 1827 LOOSE
------------------------------------------------------------------------------------------------------------------------------------
1EA COWLING PUMP 55543 LOOSE
------------------------------------------------------------------------------------------------------------------------------------
1EA OIL SERVICE UNIT (2 GALLON) 53361-6PWS LOOSE
------------------------------------------------------------------------------------------------------------------------------------
3EA EXTENSION CORDS C31-25 L1 - CLOSET
------------------------------------------------------------------------------------------------------------------------------------
1EA THREAD PROTECTER 0227046-501 LDS
------------------------------------------------------------------------------------------------------------------------------------
3EA HEADSET GROUND H3336 L-1 CLOSET
------------------------------------------------------------------------------------------------------------------------------------
1EA 6' LADDER GRANGER 3W421 BULK PIT
------------------------------------------------------------------------------------------------------------------------------------
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<PAGE>

ANNEX C-2
Page 1 of 2

MAS ENGINEERING HANDLING PROCEDURES
-----------------------------------

This procedure is written as a general guide for engineering handling of WORLD
Aircraft for as long as the Aircraft are operating with MH flight numbers.

1. ACCEPTANCE CHECKS
-----------------

1.1 Acceptance checks by MAS will be carried out in KUL upon arrival of
the Aircraft inspection check sheet.

2. ENGINEERING GROUND HANDLING
---------------------------

2.1 Engineering ground handling at all scheduled stations will be provided
at MAS expense.

2.2 All equipment required to perform engineering handling will not be
rechargeable to WORLD.

2.3 WORLD Engineers will be at the Aircraft to oversee the maintenance
personnel provided by MAS.

2.4 WORLD Engineers will be at the allocated parking bays 15 minutes prior
to STA for all arrivals.

2.5 Ground Support Equipment provided to the Aircraft with the APU shut
down will not be rechargeable to WORLD.

2.6 All aircraft servicing done by MAS Apron Services Unit in KUL or PEN,
and by MAS or it's agents at all other scheduled stations specified in
Annex B, is not rechargeable to WORLD. At KUL and PEN only, a
servicing team shall consist of two artisans.

2.7 MAS will provide artisans for ground to cockpit communication at all
stations.

2.8 Wheel build-up is not rechargeable to WORLD.

3. CERTIFICATION
-------------

3.1 WORLD Engineers will certify aircraft airworthiness release for all
stations. Engineers travelling as crewmembers are required to be in
possession of valid passports for each station.

4. ENGINEERING DELAYS
------------------

For line stations, a delay Telex will be prepared by WORLD personnel which
must be sent by MAS or its ground handling agent to KULELWO, KULKKWO,
KULELMH, KULWWMH, IADDDWO, IADMMWO and onward stations for delays of 3
minutes and above. Details required in the telex will be as follows:

(i) Station/aircraft registration flight/flight number/date
(ii) Reason for delay
(iii) Duration of delay

<PAGE>

ANNEX C-2
PAGE 2 OF 2

4.4 In the event of lengthy delays, an update telex must be sent every 3-4
hours, followed by final telex.

4.5 A delay warning telex per 4.3 is required whenever a delay of more
than 30 minutes is anticipated.

5. INCIDENT REPORTING
------------------

5.1 All flight incidents reportable to the FAA must be copies to Malaysian
DCA per WORLD and MAS's procedures using DCA irregularity form.

5.2 All ground incidents reportable to the FAA shall be reported to other
parties in accordance with WORLD and MAS procedures.

55
<PAGE>

ANNEX C-3
PAGE 1 OF 2

TRANSIT SERVICES AND OTHER MAINTENANCE
--------------------------------------

1. Transit Services
----------------

During transit ground time of the aircraft at all scheduled stations
specified in the Flight Schedule as per Annex B, MAS will provide the
following services free to charge, under WORLD's supervision.

(a) Ramp Services

(b) Aircraft Servicing

- Exterior cleaning of flight deck windows on request of WORLD
- Aircraft de-icing if necessary.

MAS shall provide all aircraft fuel, oil (Exxon 2380), de-icing,
lubricating and hydraulic fluid (skydrol 500 B-4) as well as:

- Arrangement with suppliers
- Supervision of fueling/defueling operations
- Arrangements with suppliers in connection with supervision of
replenishing operations

NOTE: Flight release will be signed by WORLD's flight crew personnel.

2. Other Maintenance
-----------------

A. Scheduled Maintenance

B. Engine Changes

MAS shall provide WORLD free of charge at KUL with the hangar
facilities, and, if available tools and equipment necessary for engine
installations and removal. The same facilities and services shall be
provided by MAS or its agents at all other stations specified in
Annex B, subject to availability. Should that assistance be provided
by a party other than MAS, then WORLD shall reimburse MAS for the
assistance provided at MAS/s cost.

-56-

<PAGE>

ANNEX C-3
PAGE 2 of 2

C. Workshops and Other Engineering

All rechargeable requests for WORLD for manpower, equipment, spares and
materials must be accompanied by work order issued by WORLD inspector or
maintenance manager.

i. Repair of Spare Parts of Components

Materials costs incurred by MAS for WORLD rotable/spare parts and
components shall be charged to WORLD at MAS cost. Labor costs shall be
charged at the rate of RM 55 per manhour.

ii. Other Repairs and Services

Repairs and all other services provided by MAS facilities in support of
the operation of the Aircraft in this Agreement shall be charged to WORLD
on a material used basis at MAS cost. MAS shall assist WORLD in providing
engineering drawings as required. All repairs accomplished by MAS
engineering shall be at WORLD cost and certified by WORLD Quality Control.

iii. Major Structural Repairs and Modifications

In the case of major structural repairs and modifications WORLD shall
reimburse MAS for labor at a rate of RM 55 per manhour and for any
material costs at MAS cost.

iv. Rotable Parts

All rotable parts repaired or supplied by MAS must have an FAA Repair
Station Parts tag.

57
<PAGE>

ANNEX D

HOTEL ACCOMMODATIONS
--------------------

WORLD shall inform MAS's local station of the number of rooms required and shall
provide the names of the flight crewmembers no later than forty-eight (48) hours
prior to the Aircraft's scheduled arrival at such station. WORLD shall promptly
inform MAS regarding changed accommodation requirements.

Hotel to airport crew transportation shall be arranged and paid for by MAS's
local station.

58
<PAGE>

ANNEX E

POSITIONING/DEPOSITIONING OF WORLD PERSONNEL
--------------------------------------------

Transportation costs for WORLD personnel performing services in connection
with this Agreement shall be governed by the following provisions:

1. Positioning/Depositioning

(a) Transportation cost for the positioning/depositioning of WORLD
personnel to and from any MAS station within the MAS network
shall be for MAS's accounts.

(b) All booking and ticketing necessary for the transportation of
WORLD personnel above shall be arranged through the following
MAS office or such other office as shall be advised by MAS:

MAS Flight Operations
AirTel Complex
Kuala Lumpur International Airport

2. Changes/Cancellations

In the event MAS request a schedule change, a flight cancellation or
an additional flight, WORLD shall promptly advise MAS of additional
crew transportation requirements and any additional transportation
cost resulting from such change.

3. Additional Costs

Additional flight crew positioning costs resulting from air traffic
control or weather delays/cancellations shall be for the account of
MAS.

4. Transportation of Dependents

Dependents of WORLD personnel performing services in connection with
this Agreement shall be entitled to EY transportation to KUL free of
charge not more than once in any calendar year. Passes for dependents
shall be available of MAS's scheduled passenger network only.

59
<PAGE>

ANNEX F

NOTIFICATION OF FLIGHT CANCELLATION

FLIGHT DELAYS OR DIVERSION

With respect to flight cancellations, flight delays or diversions of the
Aircraft, the parties agree to follow the following procedures:

1. Notification By WORLD. WORLD shall immediately notify MAS of any
---------------------
event which does, or is likely to, delay or disrupt the scheduled operation of
the Aircraft.

2. Notification By MAS. MAS shall immediately notify WORLD of any event
-------------------
which does, or is likely to, delay or disrupt the scheduled operation of the
Aircraft.

3. Remedies For Delays. Each party shall exercise its best efforts to
-------------------
minimize delays and disruptions and ensure that the Aircraft operates in
accordance with the Schedule specified in Annex B. Any efforts by either party
to minimize a delay or disruption shall be communicated to the other party
hereto, and if possible, shall be agreed to by WORLD and MAS before
implementation thereof. In the event of any disagreement between WORLD and MAS
regarding efforts to remedy any delay or disruption, WORLD shall make the final
decision.

4. Notification of Schedule Change. Any request for a schedule change
-------------------------------
resulting from a flight cancellation, flight delay or diversion of the Aircraft,
shall be issued by MAS's operations control centre. Receipt of such request
shall be confirmed immediately by WORLD's dispatch center.

<PAGE>

ANNEX G

NOTICES
_______

Operational communications addressed to WORLD shall be sent to the
appropriate contact specified below:

Rush all urgent messages concerning flight cancellations, delays or
Aircraft diversions to:

WORLD: IADDDWO 24 Hour Duty Dispatch
IADMMWO 24 Hour Maintenance Control
Movement Messages
Irregularities
IADDKWO Crew Information
FRASSWO WORLD General Manager Europe
FRAOOWO WORLD Frankfurt Operations
KULKKWO WORLD Operations Control
KULELWO WORLD Maintenance/Stores
TYOOOWO WORLD Tokyo Operations
ANCDYXH DynAir, Inc.
Attn: WORLD Airways Rep.

<PAGE>

Exhibit 10.104

AMENDMENT NO. 4 TO STOCK RESTRICTION AGREEMENT
----------------------------------------------

AMENDMENT NO. 4, dated as of December 1, 1994 (this "Amendment"), to the
Stock Restriction Agreement, dated as of September 14, 1990, as amended by
Amendment No. 1 thereto dated as of August 29, 1991, Amendment No. 2 thereto
dated as of March 31, 1993, and Amendment No. 3 dated September 1, 1994 (the
"Stock Restriction Agreement"), by and among WorldCorp, Inc., a Delaware
corporation ("WorldCorp"), William F. Gorog, Jonathan M. Gorog, Peter M. Gorog,
Henry R. Nichols, William N. Melton and John Porter.

WHEREAS, the parties to the Stock Restriction Agreement desire to amend
certain provisions thereof.

1. Defined Terms.
-------------

Capitalized terms used but not defined in this Amendment shall have the
meanings assigned to such terms in the Stock Restriction Agreement.

2. Amendments.
----------

(i) The first paragraph of Section 6 of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:

(ii) Section 6(a) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

"(a) The exercise price of the Optioned Shares (the "Exercise Price") shall
be $3,885,249 payable as follows:

October 14, 1994 $ 400,000 Cash
171,261 WOA Shares
(see below for Valuation and
issue dates)

<PAGE>

February 2, 1995 $1,394,500 Cash
$ 922,875 Worth of WOA shares
(see below for Valuation and
issue dates)

For purposes hereof, WorldCorp Common Stock will be valued as follows: (1)
any WorldCorp Common Stock to be issued based on the October 14, 1994
exercise shall be valued based on the average closing price reported on the
New York Stock Exchange ("NYSE") for the 30 day period from August 3, 1994
through September 2, 1994, and shall be issued when the Company has filed
with the Securities and Exchange Commission ("SEC") an effective
Registration Statement on Form S-1, S-2 or S-3 covering the optioned
shares; and (2) any WorldCorp Common Stock to be issued based on the
February 2, 1995 exercise shall be valued based on the average closing
price reported on the NYSE for the 30 day period from December 2, 1994
through January 2, 1995, and shall be issued when the Company has filed
with the SEC an effective Registration Statement on Form S-1, S-2 or S-3
covering the optioned shares.

(iii) Section 6(e) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

"(e) WorldCorp's option to purchase the Optioned Shares, granted under
this Section 6, shall be exercised at the times, and in the manner,
specified in Section 6(a) hereof."

3. Effect of Amendment.
-------------------

The Stock Restriction Agreement shall remain in full force and effect as
modified by this Amendment.

4. Headings.
--------

The headings contained in this Amendment are for reference purposes only,
shall not be deemed a part of this Amendment and shall not affect in any way the
meaning or interpretation of this Agreement.

5. Counterparts.
------------

This Amendment may be executed simultaneously in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

2
<PAGE>

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the parties hereto as of the date first above written.

WORLDCORP, INC.

By: /s/ T. Coleman Andrews, III
-----------------------------------------
Name: T. Coleman Andrews, III
President and Chief Executive Officer

WILLIAM F. GOROG

/s/ William F. Gorog
___________________________________

JONATHAN M. GOROG

/s/ Jonathan M. Gorog
____________________________________

PETER M. GOROG

____________________________________

HENRY R. NICHOLS

____________________________________

WILLIAM N. MELTON

____________________________________

JOHN PORTER

____________________________________

<PAGE>

EXHIBIT 1O.105

STOCK PURCHASE AGREEMENT
------------------------

THIS STOCK PURCHASE AGREEMENT (the "Agreement") dated as of this 31st day
of December 1994, is made and entered into among MHS Berhad, a Malaysian
corporation (the "Shareholder") and WorldCorp, Inc., a Delaware corporation (the
"Purchaser"). This Agreement sets forth the terms and conditions pursuant to
which the Purchaser will purchase from the Shareholder five percent (5%) of the
issued and outstanding shares of capital stock of World Airways, Inc., a
Delaware corporation (the "Company") in consideration for the Purchase Price (as
such term is herein defined). Certain capitalized terms used in this Agreement
are defined in Article IV hereof. All amounts referenced in this Agreement are
in United States Dollars.

In consideration of the foregoing, the mutual agreements, covenants,
representations and warranties contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the terms and conditions hereinafter set forth, the parties hereto
hereby agree as follows:

ARTICLE I
PURCHASE AND SALE OF SHARES
---------------------------

1.01 Purchase and Sale of Shares. Subject to the terms and conditions
---------------------------
hereinafter set forth, at the Closing, the Shareholder shall sell, assign,
transfer and deliver to the Purchaser, and the Purchaser shall purchase and
acquire from the Shareholder, 500,000 shares (the "Shares") of the issued and
outstanding shares of Common Stock, par value $.001 per share (the "Common
Stock"), of the Company. At the Closing, the Shareholder shall deliver to the
Purchaser certificate(s) representing the 500,000 Shares, together with the
accompanying stock powers or instruments of assignment, duly endorsed in blank
for the transfer of such Shares to the Purchasers and with all necessary
transfer taxes paid or other revenue stamps affixed thereto.

1.02 Payment of Purchase Price for Shares. Subject to the terms and
------------------------------------
conditions of this Agreement, the Purchaser shall pay to the Shareholder as the
total Purchase Price for the Shares, the sum of Eight Million Five Hundred
Thousand Dollars ($8,500,000)(the "Purchase Price") which amount shall be
payable by the Purchaser in a promissory note (the "Note") in the form of

Schedule 1.02 hereto or in such other consideration as is mutually agreeable to
-------------
the parties hereto. The Note shall be secured by the Shares only, and shall be
due on December 31, 1995.

1
<PAGE>

1.03 Closing. Subject to the terms and conditions hereof, the closing
-------
(the "Closing") shall take place at a time that is mutually agreeable to the
parties, but not later than midnight March 31, 1995. The parties agree that
time is of the essence with respect to all of their obligations under this
Agreement. Accordingly, the parties agree to use their best efforts to fulfill
each term and condition hereof and to work cooperatively and diligently to
facilitate the Closing by the Closing Date.

ARTICLE II
REPRESENTATIONS AND WARRANTIES BY THE SHAREHOLDER
-------------------------------------------------

The Shareholder hereby represents and warrants to the Purchaser as follows:

2.01 Title to Shares; Other Rights.
-----------------------------

(a) On the date hereof, the Shareholder is the owner of all right,
title and interest (beneficial and of record) in and to 2,490,000 shares of the
Common Stock of the Company, free and clear of all Liens, of which total amount,
Shareholder is selling hereunder 500,000 shares to the Purchasers for
$8,500,000.

(b) Except as specifically contemplated by this Agreement, no Person
has any Contract or any right (whether pre-emptive or contractual) for the
purchase of any of the Shares.

2.02 Authorization. The Shareholder has the full corporate power and
-------------
authority necessary to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The Board of
Directors of the Shareholder has approved this Agreement and the transactions
contemplated hereby, and no other corporate or shareholder proceedings on the
part of the Shareholder are necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by duly authorized officers of the Shareholder, and constitutes the
legal, valid and binding obligation of the Shareholder, enforceable against
Shareholder, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditor's rights
and except that the availability of the equitable remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any
proceeding is brought.

2.03 No Conflict. Except as set forth in Schedule 2.03 hereto, neither
----------- -------------
the execution, delivery and performance of this Agreement by the Shareholder,
nor the consummation by the Shareholder of the transactions contemplated hereby
will (i) conflict with or result in a violation, contravention or breach of any
of the terms, conditions, or provisions of Shareholder's Charter, Certificate of
Incorporation, Articles of Association or similar document, as amended, or its
By-Laws, as amended, (ii)

2
<PAGE>

result in a default under or require the consent or approval of any party to any
material contract of the Shareholder other than such consents or approvals as
which have been obtained, (iii) result in the violation of any law, rule,
regulation or order, whether U.S. or foreign, applicable to the Shareholder, or
(iv) result in the creation or imposition of any Lien upon any asset of the
Shareholder or the Shares.

2.04 Litigation and Orders. Except as disclosed in Schedule 2.04 hereto,
--------------------- -------------
there are no outstanding Orders applicable to or binding upon the Shareholder
with respect to the Shares, and, except as disclosed on Schedule 2.04 hereto,
-------------
there is no Litigation pending, or to the Knowledge of the Shareholder,
threatened or contemplated, and to the Knowledge of the Shareholder, there is no
basis for any such Litigation or any state of facts or occurrence of any event
which is reasonable likely to give rise to the foregoing.

2.05 Approvals; Compliance With Regulations and Orders.
-------------------------------------------------

(a) Except as set forth in Schedule 2.05 hereto, no consent,
-------------
approval or authorization of, prior filing, registration, declaration with or
notice to, or other action by, any U.S. or Malaysian Governmental Authority,
including without limitation, the U.S. Department of Transportation, the Federal
Aviation Administration, the U.S. Department of Justice, the Malaysian Civil
Aviation Authority or any other Malaysian Governmental Authority are required to
be obtained by the Shareholder in connection with the authorization, execution,
delivery and performance by the Shareholder of this Agreement or the
consummation of the transactions contemplated herein.

(b) Neither the Shareholder nor any officer, director, shareholder,
or, to the Knowledge of the shareholder, any agent or other representative of
the shareholder acting or purporting to act on behalf of the Shareholder or, to
the knowledge of the Shareholder, any business enterprise with which the
Shareholder has been associated or affiliated, has, directly or indirectly, made
or authorized any payment, contribution or gift of money, property, or services,
in violation of the U.S. Foreign Corrupt Trade Practices Act(i) as a kickback or
bribe to any Person, or (ii) to any political organization or the holder of, or
any aspirant to, any elective or appointive office of any nation, state,
political subdivision thereof, or other Governmental Authority.

2.06 Statements True and Correct. No representation or warranty made by
---------------------------
the Shareholder to the Purchaser pursuant to this Agreement contains or will
contain any untrue statement of material fact or omits or will omit to state a
material fact necessary to make the statements contained therein not misleading.

3
<PAGE>

ARTICLE III
REPRESENTATIONS AND WARRANTIES BY THE PURCHASERS
------------------------------------------------

The Purchaser represents and warrants to the Shareholder as follows:

3.01 Authorization. The Purchaser has the full power and authority
-------------
necessary to enter into and perform each of its obligations under this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Purchaser and constitutes the
legal, valid and binding obligation of the Purchaser, enforceable against the
Purchaser, in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditor's rights and except that the availability of the
equitable remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding is brought.

3.02 Resale of Shares. The Purchaser is acquiring the Shares
----------------
hereunder for investment purposes only and not with a view to, or for resale in
connection with, the distribution thereof and with no intention of distributing
or selling any thereof except in compliance with Federal or State securities
laws, and will make no sale or other transfer of the Shares except in compliance
with Federal or State securities laws. The Purchaser had, and will continue to
have, the opportunity to ask questions of an receive answers or obtain
additional information from representatives of the Company concerning the
financial and other affairs of the Company and the terms and condition of the
sale of the Shares. Based upon his knowledge and experience in financial and
business matters, the Purchaser is familiar with the investments of the sort
which he is undertaking herein; the Purchaser is fully aware of the problems and
risks involved in making an investment of this type and is capable of evaluating
the merits and risks of this investment.

3.03 Consents. Except as set forth on Schedule 3.03 hereto, no
-------- -------------
consent, approval or authorization of, prior filing, registration, declaration
with or notice to, or other action by, any third party is required to be
obtained by any of the Purchasers in connection with the authorization,
execution, delivery and performance by each Purchaser of this Agreement or the
consummation of the transactions contemplated herein.

4
<PAGE>

ARTICLE IV
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
-----------------------------------------------

4.01 Purchaser's obligation to purchase the Shares, and to fulfill
each of its other obligations hereunder, is conditioned upon, and subject to,
the conditions precedent set forth in Schedule 4.01 hereto.
-------------

ARTICLE V
DEFINITIONS
-----------

The following terms (in their singular and plural forms as
appropriate) as used in this Agreement shall have the meanings set forth below
unless the context requires otherwise:

5.01 "Affiliate" of a Person shall mean: (i) any Person, directly,
-----------
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with the other Persons, or (ii) any officer, director,
partner, employee or direct or indirect beneficial owner of any ten percent
(10%) or greater equity or voting interest of the other Person, (iii) or any
entity for which any Person described in clause (ii) above acts in any capacity.

5.02 "Agreement" means this Stock Purchase Agreement, including the
-----------
Schedules delivered pursuant hereto and each of which is incorporated in and
made a part of this Agreement by this reference and each of which may be
referred to in this Agreement without being attached hereto.

5.03 "Closing" shall mean the consummation of the stock acquisition
---------
and the other transactions contemplated by this Agreement.

5.04 "Closing Date" shall have the meaning set forth in Section 1.03
--------------
hereof.

5.05 "Common Stock" means on the date hereof, the 20,000,000 shares
--------------
of common stock, par value $.001 per share of the Company, 10,000,000 of which
are issued and outstanding on the date hereof.

5.06 "Company" means World Airways, Inc., a Delaware corporation.
---------

5.07 "Knowledge" means matters that the Shareholder or any Purchaser
-----------
either actually knows or should have known from a reasonable review of all
relevant records.

5.08 "Governmental Authority" shall mean any federal, state, county,
------------------------
local foreign or other governmental agency, ministry, department,
instrumentality,

5
<PAGE>

commission, authority, board or subdivisions thereof, or any foreign equivalent
thereof.

5.09 "Lien" means any mortgage, lien, security interest, pledge,
------
hypothecation, encumbrance, restriction, reservation, encroachment,
infringement, easement, conditional sale agreement, title retention or other
security arrangement, defect of title, adverse right or interest, charge or
claim of any nature whatsoever of, on, or with respect to any property or
property interest.

5.10 "Litigation" means any judicial or administrative action or
------------
other proceeding, arbitration, cause of action, claim, complaint, criminal
prosecution, demand, hearing, inquiry, investigation (governmental or
otherwise), notice (written or oral) by any Person alleging potential liability
relating to or affecting the Shareholder, its assets, business, or the
transactions contemplated by this Agreement.

5.11 "Order" means any decree, injunction, judgment, order, ruling,
-------
writ, quasi-judicial decision or award or administrative decision or award of
any federal, state, local, foreign, or other court, arbitrator, mediator,
tribunal, administrative agency or Governmental Authority to which any Person is
a party.

5.12 "Shares" means the 500,000 shares of Common Stock of the Company
--------
being sold hereunder for $8,500,000 by the Shareholder to the Purchasers.

ARTICLE V
MISCELLANEOUS
-------------

6.01 Entire Agreement. This Agreement and the documents
----------------
specifically referred to herein or executed and delivered concurrently herewith,
constitute the entire agreement, understanding, representations and warranties
of the parties hereto and supersede any prior agreement, understanding,
representation, warranty, documents or drafts relating to the subject matter of
this Agreement.

6.02 Amendments. This Agreement may be amended or modified only by a
----------
written instrument executed by each of the parties hereto, or their respective
successors and assigns.

6.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

6
<PAGE>

IN WITNESS WHEREOF, the Purchaser and the Shareholder have duly
executed this Agreement as of the date first above written.

MHS BERHAD,
as Shareholder

By: _____________________________

Name: ___________________________

Title: __________________________

WORLDCORP, INC.,
as Purchaser

By: _____________________________

Name: __________________________

Title: __________________________

7
<PAGE>

SCHEDULE 3.03

CONSENTS
--------

The Purchaser's obligation to purchase the Shares from the Shareholder
is subject to, and conditioned upon, the Purchaser's receipt of approvals from
the following holders of Purchaser's indebtedness:

1. WorldCorp, Inc. 7% Convertible Subordinated Debentures due 2004,
Indenture dated as of May 15, 1992, The First National Bank of Boston,
Trustee.

2. WorldCorp, Inc. 13 7/8% Subordinated Notes Due August 15, 1997,
Indenture dated as of August 15, 1987, Norwest Bank Minneapolis, N.A.,
Trustee.

8
<PAGE>

SCHEDULE 4.01

CONDITIONS PRECEDENT
--------------------

The Purchaser's obligation to purchase the Shares from the
Shareholder, and to fulfill each of Purchaser's obligations under the Stock
Purchase Agreement dated as of December 31, 1994, between MHS Berhad ("MHS") as
Seller/Shareholder and WorldCorp, Inc., as Purchaser, is subject to, and
conditioned upon, satisfaction of the following conditions precedent:

1. Purchaser's receipt of all consents and approvals required from the
following holders of WorldCorp's indebtedness:

a. WorldCorp, Inc. 7% Convertible Subordinated Debentures Due 2004,
Indenture dated as of May 15, 1992, The First National Bank of
Boston, Trustee.

b. WorldCorp, Inc. 13 7/8% Subordinated Notes Due August 15, 1997,
Indenture dated as of August 15, 1987, Norwest Bank Minneapolis,
N.A., Trustee.

2. The execution, delivery and performance by Malaysian Airline System Berhad
("MAS") of Amendment No. 1 to the Passenger Services and Freighter Services
Agreements dated as of December 31, 994, between World Airways, Inc. and
MAS, substantially in the form attached as Exhibit 4.01 hereto.
------------

<PAGE>

EXHIBIT 10.106

PROMISSORY NOTE

$8,500,000 December 31, 1994

FOR VALUE RECEIVED, WorldCorp, Inc., a Delaware corporation ("Borrower"),
hereby promises to pay to the order of Malaysian Helicopter Services Berhad, a
Malaysian corporation ("Lender"), at Lender's executive offices located at No.
4, Lorong 19/1A, 46300 Petaling Jaya, Selangor Darul Ehsan, West Malaysia, on
December 31, 1995, in lawful money of the United States and in immediately
available funds, the principal amount of Eight Million Five Hundred Thousand
Dollars ($8,500,000). Lender acknowledges and agrees that Borrower's
obligations hereunder, and under the Stock Purchase Agreement (the "Stock
Purchase Agreement") of even date herewith, between Lender and Borrower are
subject to, and conditioned upon, the satisfaction of the conditions precedent
to Purchaser's obligations set forth in Article IV of the Stock Purchase
Agreement.

This Promissory Note (the "Note") evidences the loan (the "Loan") in the
principal amount of Eight Million Five Hundred Thousand Dollars ($8,500,000)
made to Borrower by Lender pursuant to that certain Stock Purchase Agreement of
even date herewith (the "Stock Purchase Agreement") among Lender (as "Seller"
and "Shareholder" therein) and Borrower (as "Purchaser" therein). Capitalized
terms not defined herein shall have the meaning ascribed in the Stock Purchase
Agreement. This Note is secured by a pledge of the Shares pursuant to the terms
of a Stock Pledge Agreement of even date herewith, between Lender and Borrower
(the "Pledge Agreement").

Interest shall accrue on the unpaid principal amount of this Note on the
basis of a year of 365 days (366 days in a leap year) for the actual number of
days elapsed, from the date of this Note, in like money, at Lender's executive
offices, at the rate of six percent (6%) interest per annum (the "Interest
Rate"). All accrued interest on the Loan shall be due and payable on December
31, 1995.

If for any reason whatsoever, Borrower's obligations hereunder involves the
payment of interest in excess of that permitted by law, and if, under any
circumstances, Lender receives as interest any amount which would exceed the
highest lawful rate applicable to Borrower, such amount which would be excessive
interest shall applied to reduce the unpaid principal balance and not the
payment of interest.
<PAGE>

If any payment is to be made on a day other than a Business Day, such
payment shall instead be made on the immediately preceding Business Day.

This Note shall be governed by the laws of the State of Virginia.

WORLDCORP, INC.

By:__________________________

Name: _______________________

Title:_______________________

disk loc. drew7
file loc. prom note

<PAGE>

EXHIBIT 10.107

AMENDMENT NO. 1
TO
PASSENGER AIRCRAFT SERVICES
AND
FREIGHTER SERVICES AGREEMENTS

THIS AMENDMENT NO. 1 TO PASSENGER SERVICES AGREEMENT AND FREIGHTER SERVICES
AGREEMENT (as such terms are defined below) is entered into this ___th day of
December, 1994, by and between World Airways, Inc., a Delaware corporation
("World Airways") and Malaysian Airline System Berhad, a Malaysian corporation
("MAS").

WHEREAS, World Airways and MAS are parties to that certain Aircraft
Service Agreement (the "Passenger Services Agreement") dated September 26, 1994,
pursuant to which MAS leased two (2) MD-11 passenger aircraft from world airways
for a term (the "Passenger Lease Term") commencing September 27, 1994 and
expiring March 31, 1995; and

WHEREAS, World Airways and MAS are also parties to that certain Freighter
Services Agreement (the "freighter Services Agreement") dated October 6, 1994,
which Freighter Services agreement novated the earlier freighter services
agreement between the parties, pursuant to which MAS committed to leasing two
(2) MD-11 aircraft from World Airways to be used by MAS in freighter
configuration, for a term beginning on June 15, 1994 and expiring September 30,
1999 (the "Freighter Lease Term"); and

WHEREAS, the parties desire to amend in certain respects both the Passenger
Services Agreement and the Freighter services Agreement (hereinafter referred to
collectively as the "Agreements"), and to agree to certain other terms and
conditions of their relationship.

NOW, THEREFORE, in consideration of the foregoing and other mutual
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

1. Maintenance Activities:
----------------------

1.1 World Airways agrees to shift substantial amounts of
airframe maintenance work to MAS' facilities in Kuala Lumpur, Malaysia.

1.2 World Airways agrees to continue to work with Pratt &
Whitney to achieve for MAS's PW4056 and PW4168 engine maintenance guarantees the
same or better economic terms available to World Airways.
<PAGE>

2. Freighter Activities:
--------------------

2.1 World Airways will collaborate to the maximum extent
possible to use their respective rights and other capabilities to build a
successful worldwide cargo system. To accomplish this objective, MAS and World
Airways will in every respect accord each other "most favored nation" status.

2.2 The hourly rate for cargo operations will be reviewed on or
about 1 January, 1995 for all of the World Airways MD-11 freighter aircraft
presently leased, and to be leased in the future, to MAS.

2.3 MAS agrees to lease a third (3rd) freighter aircraft from
World Airways, operation of which will begin after the last 1995 Hadj flight on
the same terms and conditions as the first two (2) freighter aircraft leased by
MAS from World airways, except that the term for this third (3rd) aircraft will
be as mutually agreed by World Airways and MAS.

3. Passenger Activities:
--------------------

3.1 MAS agrees to lease two (2) MD-11 passenger aircraft from
World Airways for use in MAS' regional operations on the same terms and
conditions set forth in the Passenger Services Agreement, except that: (1) the
Term of the Agreement shall run from 1 January 1995 to 31 December 1996; and (2)
the rate to be paid by MAS for the two (2) passenger MD-11 aircraft from World
Airways shall be the existing Umrah rate of $5,400 per block hour.

3.2 MAS agrees to release the two (2) passenger MD-11 aircraft leased from
World Airways for Hadj operations during each Hadj period occurring during the
term of the Passenger Services Agreement, as extended hereby.

3.3 The hourly rate for all aircraft, crew, maintenance and insurance
("ACMI") passenger operations (including, but not limited to, the two (2)
regional aircraft referred to in Section 3.1 hereof) will be the existing Umrah
rate of USD $5,400 per hour, effective 1 January 1995.

3.4 MAS agrees to commence operation of one (1) passenger MD-11 aircraft
leased from World Airways on the KUL-JNB-CPT-EZE route after the last 1995 Hadj
flight on a date to be mutually agreed to, and MAS agrees to operate one (1)
passenger MD-11 aircraft leased from World Airways on this route, or on an
operationally and economically equivalent route, for a period of five (5) years.

3.5 MAS agrees that the one (1) MD-11 passenger aircraft leased from World
Airways on the KUL-JNB-CPT-EZE route will operate not less than 360 hours/month
representing two (2) full weekly rotations, with the expectation of a third
(3rd) JNB rotation upon receipt by MAS of required operating authority.
<PAGE>

4. Passenger Charter Operations:
----------------------------

4.1 MAS and World Airways agree to use every reasonable effort
to develop existing periodic Umrah operations into regular charter operations
that operate in the 9 1/2 months of each year when Hadj operations are not
taking place.

5. Miscellaneous.
-------------

Except as amended hereby, all of the terms and conditions set
forth in the Passenger Services Agreement and the Freighter Services agreement
shall remain the same and in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.1 to
be executed as of the day and year first-above written.

WORLD AIRWAYS, INC.

By: ___________________________

Name: _________________________

Title: ________________________

MALAYSIAN AIRLINE SYSTEM BERHAD

By: ___________________________

Name: _________________________

Title: ________________________

Disk loc. Drew7
File loc. amend1

<PAGE>

Exhibit 10.108

AMENDMENT NO. 5 TO STOCK RESTRICTION AGREEMENT
----------------------------------------------

AMENDMENT NO. 5, dated as of January 2, 1995 (this "Amendment"), to the
Stock Restriction Agreement dated as of September 14, 1990, as amended by
Amendment No. 1 thereto dated as of August 29, 1991, Amendment No. 2 thereto
dated as of March 31, 1993, Amendment No. 3 dated September 1, 1994 and
Amendment No. 4 dated December 1, 1994 (the "Stock Restriction Agreement") by
and among WorldCorp, Inc., a Delaware corporation ("WorldCorp"), William F.
Gorog, Jonathan M. Gorog, Peter M. Gorog, Henry R. Nichols, William N. Melton
and John Porter.

WHEREAS, the parties to the Stock Restriction Agreement desire to amend
certain provisions thereof.

1. Defined Terms.
-------------

Capitalized terms used but not defined in this Amendment shall have the
meanings assigned to such terms in the Stock Restriction Agreement.

2. Amendments.
----------

(i) The first paragraph of Section 6 of the Stock Restriction Agreement is
hereby amended to read in its entirety as follows:

"6. OPTION TO PURCHASE FOUNDERS' SHARES. Subject to the
-----------------------------------
provisions of Section 6(b) hereof, the Founders hereby grant to
WorldCorp the option (the "Option"), exercisable after September 10,
1991, to purchase 4,757,679 of the outstanding shares of Common Stock
held by such Founders (the "Optioned Shares")."

(ii) Section 6(a) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

"(a) The exercise price of the Optioned Shares (the "Exercise Price") shall
be $3,885,238 payable as follows:

October 14, 1994 $ 400,000 Cash

January 2, 1995 $ 831,000 Promissory Note
<PAGE>

February 16, 1995 $ 563,500 Cash and Promissory Note
$2,090,738 302,282 WOA Shares

For purposes hereof, any WorldCorp Common Stock to be issued based on the
February 16, 1995 exercise shall be valued based on the average closing
price reported on the NYSE for the 30 day period from November 15, 1994
through December 15, 1994, and shall be issued only after the Registration
Statement on Form S-3 covering the optioned shares, filed by the Company
with the SEC, is declared effective.

(iii) Section 6(e) of the Stock Restriction Agreement is hereby amended to
read in its entirety as follows:

"(e) WorldCorp's option to purchase the Optioned Shares, granted under
this Section 6, shall be exercised at the times, and in the manner,
specified in Section 6(a) hereof."

3. Effect of Amendment.
-------------------

The Stock Restriction Agreement shall remain in full force and effect as
modified by this Amendment.

4. Headings.
--------

The headings contained in this Amendment are for reference purposes only,
shall not be deemed a part of this Amendment and shall not affect in any way the
meaning or interpretation of this Agreement.

5. Counterparts.
------------

This Amendment may be executed simultaneously in counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

2
<PAGE>

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the parties hereto as of the date first above written.

WORLDCORP, INC.

By: /s/ T. Coleman Andrews, III
-----------------------------------------
Name: T. Coleman Andrews, III
President and Chief Executive Officer

WILLIAM F. GOROG

/s/ William F. Gorog
___________________________________

JONATHAN M. GOROG

____________________________________

PETER M. GOROG

/s/ Peter M. Gorog
____________________________________

HENRY R. NICHOLS

____________________________________

WILLIAM N. MELTON

____________________________________

JOHN PORTER

____________________________________

<PAGE>
EXHIBIT 10.109

Scott & Stringfellow, Inc.

FULL ACCOUNT TITLE ACCOUNT NUMBER BROKER
-------------------------------- -------------------- -----------

-------------------------------- -------------------- -----------

CUSTOMER AGREEMENT

In consideration for you (the "Broker") opening or maintaining one or more
accounts (the "Account") for the undersigned (the "Customer"), the Customer
agrees to the terms and conditions contained in this Agreement. The heading of
each provision of this Agreement is for descriptive purposes only and shall not
be deemed to modify or qualify any of the rights or obligations set forth in
each such provision. For purposes of this Agreement, "securities and other
property" means, but is not limited to, money, securities, financial instruments
and commodities of every kind and nature and related contracts and options,
except that the provisions of paragraph 21 herein (the arbitration clause) shall
not apply to commodities accounts. This definition includes securities or other
property currently or hereafter held, carried or maintained by you or any of
your affiliates, in your possession or control, or in the possession or control
of any such affiliate, for any purpose, in and for any of my accounts now or
hereafter opened, including any account in which may have an interest.

Applicable Rules and Regulations
1. All transactions in the Customer's Account shall be subject to the
constitution, rules, regulations, customs and usages of the exchange or
market, and its clearing house, if any, where the transactions are executed
by the Broker or its agents, including its subsidiaries and affiliates.
Also, where applicable, the transactions shall be subject (a) to the
provisions of (1) the Securities Exchange Act of 1934, as amended and (2)
the Commodities Exchange Act, as amended; and (b) to the rules and
regulations of (1) the Securities Exchange Commission, (2) the Board of
Governors of the Federal Reserve System and (3) the Commodities Futures
Trading Commission.

Agreement Contains Entire Understanding/Assignment
2. This Agreement contains the entire understanding between the Customer and
the Broker concerning the subject matter of this Agreement. Customer may
not assign the rights and obligations hereunder without first obtaining the
prior written consent of the Broker.

Severability
3. If any provision of this Agreement is to be held invalid, void or
unenforceable by reason of any law, rule, administrative order or judicial
decision, that determination shall not affect the validity off the
remaining provisions of this Agreement.

Waiver
4. Except as specifically permitted in this Agreement, no provision of this
Agreement can be,nor be deemed to be, waived, altered, modified or amended
unless such is agreed to in a writing signed by the Broker.

Delivery of Securities
5. Without abrogating any of the Broker's rights under any other portion of
this Agreement and subject to any indebtedness of the Customer to the
Broker, the Customer is entitled, upon appropriate demand, to receive
physical delivery of fully paid securities in the Customer's Account.

Liens
6. All securities and other property of the Customer in any account in which
the Customer has an interest shall be subject to a lien for the discharge
of any and all indebtedness or any other obligation of the Customer to the
Broker. All securities and other property of the Customer shall be held by
the Broker as security for the payment of any such obligations or
indebtedness to the Broker in any Account that the Customer may have an
interest and the Broker subject to applicable law may, at any time and
without prior notice to the Customer, use and/or transfer any or all
securities and other property interchangeably in any Account(s) in which
the Customer has an interest (except regulated commodity Accounts).

Pledge of Securities and Other Property
7. Within the limitations imposed by applicable laws, rules and regulations,
all securities and other property of the Customer may be pledged and
repledged and hypothecated and rehypothecated by the Broker from time to
time, without notice to the Customer, either separately or in common with
such other securities and other properly of other bona fide customers of
the Broker, for any amount due to the Broker in the Customer's Account(s).
The Broker may do so without retaining in its possession or under its
control for delivery a like amount of similar securities or other property.

Interest
8. Debit balances of the Account(s) of the Customer shall be charged with
interest in accordance with the Broker's established custom, as disclosed
to the Customer pursuant to the provisions of Rule 10b - 16 of the
Securities Exchange Act of 1934.

I HAVE READ AND UNDERSTAND THE STATEMENT OF CREDIT PRACTICES DESCRIBING INTEREST
CHARGES PRINTED ON THE REVERSE SIDE.

DISCLOSURES REGARDING LIQUIDATIONS AND COVERING POSITIONS
9. THE CUSTOMER SHOULD CLEARLY UNDERSTAND THAT, NOTWITHSTANDING A GENERAL
POLICY OF GIVING CUSTOMERS NOTICE OF A MARGIN DEFICIENCY, THE BROKER IS NOT
OBLIGATED TO REQUEST ADDITIONAL MARGIN FROM THE CUSTOMER IN THE EVENT THE
CUSTOMER'S ACCOUNT FALLS BELOW MINIMUM MAINTENANCE REQUIREMENTS, MORE
IMPORTANTLY, THERE MAY/WILL BE CIRCUMSTANCES WHERE THE BROKER WILL
LIQUIDATE SECURITIES AND/OR OTHER PROPERTY IN THE ACCOUNT WITHOUT NOTICE TO
THE CUSTOMER TO ENSURE THAT MINIMUM MAINTENANCE REQUIREMENTS ARE
SATISFIED.

LIQUIDATIONS AND COVERING POSITIONS
10. THE BROKER SHALL HAVE THE RIGHT IN ACCORDANCE WITH ITS GENERAL POLICIES
REGARDING MARGIN MAINTENANCE REQUIREMENTS TO REQUIRE ADDITIONAL COLLATERAL
OR THE LIQUIDATION OF ANY SECURITIES AND OTHER PROPERTY WHENEVER BROKER'S
DISCRETION CONSIDERS IT NECESSARY FOR ITS PROTECTION INCLUDING IN THE EVENT
OF, BUT NOT LIMITED TO: THE FAILURE OF THE CUSTOMER TO PROMPTLY MEET ANY
CALL FOR ADDITIONAL COLLATERAL THE FILING OF A PETITION IN BANKRUPTCY BY OR
AGAINST THE CUSTOMER; THE APPOINTMENT OF A RECEIVER IS FILED BY OR AGAINST
THE CUSTOMER; AN ATTACHMENT IS LEVIED AGAINST ANY ACCOUNT OF THE CUSTOMER
OR IN WHICH THE CUSTOMER HAS AN INTEREST OR; THE CUSTOMER'S DEATH, IN SUCH
EVENT, THE BROKER IS AUTHORIZED TO SELL ANY AND ALL SECURITIES AND OTHER
PROPERTY IN ANY ACCOUNT OF THE CUSTOMER WHETHER CARRIED INDIVIDUALLY OR
JOINTLY WITH OTHERS TO BUY ALL SECURITIES OR OTHER PROPERTY WHICH MAY BE
SHORT IN SUCH ACCOUNT(S). TO CANCEL ANY OPEN ORDERS AND TO CLOSE ANY OR ALL
OUTSTANDING CONTRACTS, ALL WITHOUT DEMAND FOR MARGIN OR ADDITIONAL MARGIN,
OTHER NOTICE OF SALE OR PURCHASE, OR OTHER NOTICE OR ADVERTISEMENT EACH OF
WHICH IS EXPRESSLY WAIVED BY THE CUSTOMER, ANY SUCH SALES OR PURCHASES MAY
BE MADE AT BROKER'S DISCRETION ON ANY EXCHANGE OR OTHER MARKET WHERE SUCH
BUSINESS IS USUALLY TRANSACTED OR AT PUBLIC AUCTION OR PRIVATE SALE, AND
BROKER MAY BE THE PURCHASER FOR BROKER'S OWN ACCOUNT. IT IS UNDERSTOOD A
PRIOR DEMAND, OR CALL, OR PRIOR NOTICE OF THE TIME AND PLACE OF SUCH SALE
OR PURCHASE SHALL NOT BE CONSIDERED A WAIVER OF BROKER'S RIGHT TO SELL OR
BUY WITHOUT DEMAND OR NOTICE AS HEREIN PROVIDED.

Margin
11. The Customer agrees to maintain in all accounts with the Broker such
positions and margins as required by all applicable statutes, rules,
regulations, procedures and custom, or as the Broker deems necessary or
advisable. The Customer agrees to promptly satisfy all margin and
maintenance calls.

Collection of Indebtedness
12. The Customer agrees to satisfy, upon demand, any indebtedness and to pay
any debit balance remaining when the Customer's Account is closed, either
partially or totally. Customer Account(s) may not be closed without Broker
first receiving all securities and other property for which the Account is
short and all funds to pay in full for all securities and other property in
which the Account(s) are long.

BY SIGNING THIS AGREEMENT THE CUSTOMER ACKNOWLEDGES THAT:
1. THE SECURITIES IN THE CUSTOMER'S MARGIN ACCOUNT MAY BE LOANED TO THE
BROKER OR LOANED OUT TO OTHERS AND-
2. THAT THE CUSTOMER HAS RECEIVED A COPY OF THIS AGREEMENT.

AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH 21.

Transactions and Settlements
13. All orders for the purchase or sale of securities and other property will
be authorized by the Customer and executed with the understanding that an
actual purchase or sale is intended and that it is the Customer's intention
and obligation in every case to deliver certificates or commodities to
cover any and all sale or to pay for any purchase upon the Broker's
demand. If the Broker makes a short sale of any securities and other
property at the Customer's direction or if the Customer fails to deliver to
the Broker any securities and other property that the Broker has sold at
the Customer's direction, the Broker is authorized to borrow the securities
and other property necessary to enable the Broker to make delivery and the
Customer agrees to be responsible for any cost or loss the Broker may
incur, or the cost of obtaining the securities and other property if the
Broker is unable to borrow it. The Broker is the Customer's agent to
complete all such transaction and is authorized to make advances and expend
monies as are required.

Sales by Customer
14. The Customer understands and agrees any order to sell "short" will be
designated as such by the Customer and that the Broker will mark the order
as "short". All other sell orders will be for securities owned ("long"), at
that time by the Customer. By placing the order the Customer affirms that
he will deliver the securities on or before the settlement date.

Broker as Agent
15. The Customer understands that the Broker is acting as the Customer's agent,
unless the Broker notifies the Customer, in writing before the settlement
date for the transaction, that the Broker is acting as a dealer for its own
account or as agent for some other person.

Confirmations and Statements
16. Confirmations of transactions and statements for the Customer's Account(s)
shall be binding upon the Customer if the Customer does not object. In
writing, within ten days after receipt by the Customer. Notice or other
communications including margin and maintenance calls delivered or mailed
to the address given below shall until the Broker has received notice in
writing of a different address be deemed to have been personally delivered
to the Customer whether actually received or not.

Successors
17. Customer hereby agrees that this Agreement and all the terms thereof shall
be binding upon Customer's heirs, executors, administrators, personal
representatives, and assigns. This Agreement shall enure to the benefit of
the Broker's present organization, and any successor organization.
Irrespective of any change or changes at any time in the personal thereof,
for any cause whatsoever.

Choice of Laws
18. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF VIRGINIA
AND SHALL BE CONSTRUED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA.

Capacity to Contract, Customer Affiliated
19. By signing below, the Customer, represents that he/she is of legal age, and
that he/she is not an employee of any exchange, or of any corporation of
which any exchange owns a majority of the capital stock,or of a member of
any exchange, or of a member firm or member corporation registered on any
exchange,, or of a bank trust company, insurance company or of any
corporation, firm or individual engaged in the business of dealing, either
as broker or as principal, in securities, bills of exchange, acceptances or
other forms of commercial paper, and that the Customer will promptly notify
the Broker in writing if the Customer is now or becomes so employed. The
Customer also represents that no one except the Customer has an interest in
the account or accounts of the Customer with you.

Disclosures to Issuers
22. Under rule 14b - 1(c) of the Securities Exchange Act of 1934, we are
required to disclose to an issuer the name, address, and securities
position of our customers who are beneficial owners of that issuer's
securities unless the customer objects. Therefore, please check one of the
boxes below:

Yes. I do object to the disclosure of such information.
No. I do not object to the disclosure of such information.

LOAN OR PLEDGE OF SECURITIES
23. THE CUSTOMER HEREBY AUTHORIZES THE BROKER TO LEND EITHER TO ITSELF OR TO
OTHERS ANY SECURITIES HELD BY THE BROKER IN THE CUSTOMER, MARGIN ACCOUNT
AND TO CARRY SUCH PROPERTY IN ITS GENERAL LOANS. SUCH PROPERTY MAY BE
PLEDGED, REPLEDGED, HYPOTHECATED OR REHYPOTHECATED EITHER SEPARATELY OR IN
COMMON WITH OTHER SUCH PROPERTY FOR ANY AMOUNTS DUE TO THE BROKER THEREON
OR FOR A GREATER SUM AND THE BROKER SHALL HAVE NO OBLIGATION TO RETAIN A
LIKE AMOUNT OF SIMILAR PROPERTY IN ITS POSSESSION AND CONTROL.

24. Upon the effectiveness of an S-3 registration statement filed by Customer
with respect to the pledged collateral, and receipt of opinion letters
satisfactory to Scott & Stringfellow, Broker will lend funds pursuant to
the terms of this Customer Agreement.

25. This Customer Agreement has been modified by and is subject to the
provisions of the letter agreement from Scott & Stringfellow to the
WorldCorp ESOP of even date herewith, and the Registration Rights Agreement
between Scott & Stringfellow and WorldCorp, WorldCorp's Guarantee
Agreement, all of even date herewith.

WorldCorp Employee Savings and Stock Ownership Trust

William F. Gorog. Trustee 13873 Park Center Road
Herndon, VA 22071
<PAGE>

METHOD OF COMPUTING INTEREST ON YOUR ACCOUNT

INTEREST CHARGE

An interest charge will be imposed for any statement period during which your
average daily debit balance is greater than zero. The normal statement period
will end on the last Friday in each month, but will end on the last business day
of December. The statement period may be for some fraction of a normal
statement period on opening or closing your account.

Interest will ordinarily be calculated through the last Friday of the normal
statement period and will ordinarily be charged to the account on the last
Friday of the normal statement period. In December, interest will ordinarily be
calculated through the last business day of December and will ordinarily be
charged to the account on the last business day of December.

DETERMINATION OF INTEREST RATE

The annual rate of interest to be applied each time interest is charged to your
account will depend upon and will vary with the size of your average daily
debit balance for the period and with the average call money rate in effect
during the interest period, in accordance with the following schedule:

If Your Average Daily Debit The Annual interest
Balance for The Period is: Rate Applied will Be:

$0 to $24,999 1 3/4 above the average call money
rate for the period

$25,000 and above 1 1/2 above the average call money rate
for the period

The call money rate is based on published rates for call money lent brokers on
stock exchange collateral or call money rates quoted by commercial banks, as
determined by Scott & Stringfellow, Inc.

Under no circumstances will the call money rate used to determine the interest
rate exceed the cost of borrowing money. "Cost of borrowing money" shall be the
higher of (a) the interest rate charged Scott & Stringfellow, Inc., by a bank
doing business in Virginia on loans collateralized by securities; or (b) the
interest rate charged Scott & Stringfellow, Inc., by a bank doing business in
Virginia on loans for business purposes.

Your average daily debit balance for each interest period will be computed by
adding each daily debit balance in your account and dividing that sum by the
number of days in that period.

You will be given at least 30 days prior written notice of any changes in the
terms and conditions under which interest is charged other than changes which
are explained herein, are required by law or result in lower interest charges.

CALCULATION OF INTEREST CHARGES

To compute the interest charge to be made to your account for any period of
time, multiply the average daily debit balance for such period by the applicable
interest rate and by the number of days in the period and divide that product by
360.

Any credit or debit balance in the cash account will be combined with the
balance in the margin account for the purpose of computing interest.

A credit balance in any short account will not reduce the average daily debit
balance in your margin account because such credit balances are normally used to
collateralize the borrowing of stock to make delivery against the short sale.
However, short sale positions will be marked to the market weekly and such
changes resulting therefrom will affect the debit balance in your margin
account. Therefore, if such change results in a credit, such credit will be
transferred to your margin account as a credit; and conversely, if such change
results in a debit, such debit will be transferred as a debit to your margin
account.

COLLATERAL

????????????? of the Customer's Agreement which you have executed, or will
execute upon opening a margin account with us, we have or will have a general
lien on all monies, securities or other properties we may at any time be
carrying for you or which may be in our possession for any purposes, including
safekeeping, to secure the discharge of all your obligations to us.

Notwithstanding you may have deposited monies, securities or other properties
with us sufficient to satisfy the margin requirements of any law, rule or
regulation enacted or promulgated by any government regulatory body or
authority, we expressly reserve the right to require you at any time, and from
time to time, to deliver to us such additional collateral as we, in our sole
discretion, may deem necessary to adequately secure us in the discharge of all
your obligations to us.

This notice is written to conform with Securities and Exchange Commission Rule
10b-16.

Should you have any questions, please let us suggest that you talk to your
Investment Broker.

[LETTERHEAD APPEARS HERE]

<PAGE>
EXHIBIT 10.110

January 11, 1995

Mr. William F. Gorog, Trustee
WorldCorp Employee Savings and
Stock Ownership Plan
13873 Park Center Road
Herndon, Virginia 22071

Re: Supplemental Terms and Provisions to
Customer Agreement Dated January 11, 1995

Dear Mr. Gorog:

This letter agreement sets forth certain terms and provisions which are
supplemental to the terms of a Customer Agreement dated January 11, 1995, for a
margin loan to the WorldCorp ESSOP. The following terms and provisions shall
apply to this account:

1). The maintenance equity requirement for this margin account will be
40% as required by NYSE rules for margin accounts of Rule 144
affiliates. In the event that the stock price closes at $4.00 or
lower for 5 consecutive trading days, the maintenance equity
requirement will increase to 50%, and it will increase to 60% if the
stock closes at $3.00 per share for 5 consecutive trading days. The
initial debit may not exceed 50% of the market value of the
collateral shares.

2). Margin calls must be met within five (5) business days from the date
of issuance.

3). If the price of WorldCorp common stock should close at $2.00 or
lower, the shares will be moved to a cash account and the
outstanding margin loan shall be repaid in full within 24 hours.
Thereafter, the shares may not be transferred back to the margin
account until the stock returns to the $5.00 level.

4). Scott & Stringfellow will not lend or deliver the collateral shares
at any time to another broker-dealer and the shares will at all
times remain in the possession and control of Scott & Stringfellow.

P.O. Box 1575, Richmond, Virginia 23213-1575

<PAGE>

Page Two
Letter to William F. Gorog, Trustee
WorldCorp ESSOP
January 11, 1995

5). The arbitration clauses contained in paragraphs 20 and 21 of the
Customer Agreement have been eliminated due to ERISA considerations.

6). The interest rate which shall apply to this margin loan will be based
on the broker call rate as quoted in the Wall Street Journal plus 100
basis points.

7). It is our understanding that the WorldCorp ESSOP expects that the
margin debit will be reduced by approximately $90,000 per calendar
quarter. Scott & Stringfellow agrees that upon each such payment of
principal to release the number of shares determined pursuant to the
release provisions in section 6(d)(1) of the ESSOP; provided, however,
in order to prevent such a release of shares from violating the margin
requirements of the Loan Agreement, WorldCorp shall provide collateral
or make contributions adequate to maintain the margin requirements of
the Loan Agreement as required by the letter agreement, dated January
11, 1995, by and between the WorldCorp ESSOP and WorldCorp.

8). This loan is a non-recourse obligation of the ESSOP. With respect to
recourse against the ESSOP, Scott & Stringfellow will look only to the
collateral held by it for satisfaction of any amounts due.
Notwithstanding the foregoing, Scott & Stringfellow may look to
WorldCorp pursuant to the Guarantee Agreement for full payment of all
amount owed under the loan (such amounts to be determined without
regard to the non-recourse nature of the loan).

Payments made by the ESSOP of principal and interest on the loan shall
not exceed the sum of all contributions (excluding any contributions
of stock of the Company) that are made to the ESSOP by the Company to
enable the ESSOP to meet its obligations under the Loan Agreement, any
earnings on such Company contributions, and any cash dividends on the
shares of the Company stock purchased with the proceeds of the prior
loan refinanced by this Loan (whether or not such shares have been
released from pledge hereunder). Notwithstanding the foregoing
provisions, the Trustees of the ESSOP may apply the proceeds from the
sale of any shares remaining subject to pledge hereunder to pay
principal and accrued interest due on the loan in the event of the
sale of the Company or the termination of the ESSOP or if the ESSOP
ceases to be an employee stock ownership plan under section 4975(e)(7)
of the Internal Revenue Code.

9). The loan is due and payable May 23, 1996, unless earlier repaid or
unless earlier payment in part or full is required pursuant to the
terms of the Loan Agreement.
<PAGE>

Page Three
Letter to William F. Gorog, Trustee
WorldCorp ESSOP
January 11, 1995

10). Upon the occurrence of an event of default as defined below, all
principal and accrued interest under the loan shall be immediately due
and payable, and, without limiting any other rights it may have,
Scott & Stringfellow may take any action described in Section 10 of
the Customer Agreement. An event of default shall include (i) any
breach by the ESSOP of any of its obligations under the Customer
Agreement or this letter agreement, (ii) the occurrence of any of the
circumstances described in Section 10 of the Customer Agreement which
would give Scott & Stringfellow the right to take any of the actions
specified therein, (iii) a lapse in the effectiveness of the
registration statement filed pursuant to the Registration Rights
Agreement between Scott & Stringfellow and WorldCorp or any breach by
WorldCorp of any obligation under the Registration Rights Agreement,
or (iv) any black-out period pursuant to the Registration Rights
Agreement which exceeds 20 days.

Please indicate you knowledge and acceptance of these supplemental terms
and provision by signing where indicated below. Thank you.

Sincerely,

SCOTT & STRINGFELLOW, INC.

Steven C. DeLaney
First Vice President and
Chief Financial Officer

ACCEPTED.

WORLDCORP EMPLOYEE SAVINGS AND
STOCK OWNERSHIP PLAN

BY: /s/ William F. Gorog
------------------------------
William F. Gorog, Trustee

<PAGE>
EXHIBIT 10.111

GUARANTEE AGREEMENT

THIS GUARANTEE AGREEMENT (the "Agreement") is made this 11th day of
January, 1995, by Worldcorp, Inc., a corporation organized under the laws of the
State of Delaware (the "Guarantor") for the benefit of Scott & Stringfellow,
Inc. (the "Lender").

WHEREAS, the WorldCorp Employee Savings and Stock Ownership Trust (the
"Borrower") has applied to the Lender for a margin loan (the "Loan") which is to
be advanced pursuant to the terms of a Customer Agreement of even date herewith
as modified by a letter agreement dated January 11, 1995, between the Borrower
and the Lender (the "Letter Agreement") (the Customer Agreement, together with
any and all amendments and modifications thereto, renewals and extensions
thereof and substitutes therefor are herein collectively referred to as the
"Loan Agreement"); and

WHEREAS, the Guarantor has requested the Lender to enter into the Loan
Agreement with the Borrower and to make the Loan to the Borrower pursuant
thereto; and

WHEREAS, the Lender has required, as a condition of making the Loan, the
execution of this Agreement by the Guarantor.

NOW, THEREFORE, in order to induce the Lender to make the Loan to Borrower,
the Guarantor covenants and agrees with the Lender as follows:

I. The Guaranty.
-------------

1. The Guarantor hereby unconditionally and irrevocably guarantees to
the Lender:

A. the payment in full (and not merely the collectibility) of
the principal of the Loan and the interest thereon, and the full amount of any
margin call, in each case when due and payable according to the terms of the
Loan Agreement;

B. the payment in full of all other sums and charges which at
any time may be due and payable in accordance with the Loan Agreement; and

C. the due and punctual performance of all of the other terms,
covenants and conditions contained in the Loan Agreement.

This Guarantee is not limited by the provisions of Section 8 of the
Letter Agreement. In this regard, the amount of the principal, interest, margin
calls and other sums payable under the Loan Agreement shall be determined
without regard to the provisions of Section 8 of the Letter Agreement, and the
obligations of the Borrower shall not be deemed to be limited by the provisions
of Section 8 of the Letter Agreement.

2. The obligations and liabilities of the Guarantor under this
Agreement shall be absolute, unconditional, irrespective of the genuineness,
validity, priority, regularity or enforceability of the Loan Agreement or any
other circumstance which might otherwise constitute a legal or equitable
discharge of a surety or guarantor. The Guarantor expressly
<PAGE>

agrees that the Lender may, in its sole and absolute discretion, without notice
to or further assent of the Guarantor and without in any way releasing,
affecting or in any way impairing the obligation and liabilities of the
Guarantor hereunder:

A. waive compliance with, or any defaults under, or grant any other
indulgences under or with respect to the Loan Agreement;

B. grant extensions or renewals of or with respect to the Loan
Agreement;

C. effect any release, subordination, compromise or settlement in
connection with the Loan Agreement; and

D. make advances for the purpose of performing any term, provision or
covenant contained in the Loan Agreement with respect to which the Borrower
shall then be in default.

3. The obligations and liabilities of the Guarantor under this Agreement
shall be primary, direct and immediate, shall not be subject to any
counterclaim, recoupment, set off, reduction or defense based upon any claim
that the Guarantor may have against the Borrower and/or the Lender and shall not
be conditional or contingent upon pursuit or enforcement by the Lender of any
remedies it may have against the Borrower with respect to the Loan Agreement,
whether pursuant to the terms thereof or by operation of law. Without limiting
the generality of the foregoing, the Lender shall not be required to make any
demand upon the Borrower, or to sell the Collateral or otherwise pursue, enforce
or exhaust its remedies against the Borrower or the Collateral either before,
concurrently with or after pursuing or enforcing its rights and remedies
hereunder. Any one or more successive or concurrent actions or proceedings may
be brought against the Guarantor under this Agreement, either in the same
action, if any, brought against the Borrower or in separate actions or
proceedings, as often as the Lender may deem expedient or advisable. Without
limiting the forgoing, it is specifically understood that any modification,
limitation or discharge of any of the liabilities or obligations of the
Borrower, the Guarantor or any obligor under the Loan Agreement, arising out of,
or by virtue of, any bankruptcy, arrangement, reorganization or similar
proceeding for relief of debtors under federal or state law initiated by or
against the Borrower or the Guarantor or any obligor under the Loan Agreement
shall not modify, limit, lessen, reduce, impair, discharge, or otherwise affect
the liability of the Guarantor hereunder in any manner whatsoever, and this
Agreement shall remain and continue in full force and effect. It is the intent
and purpose of this Agreement that the Guarantor shall and does hereby waive all
rights and benefits which might accrue to the Guarantor by reason of any such
proceeding, and the Guarantor agrees that it shall be liable for the full amount
of the obligations and liabilities under this Agreement, regardless of, and
irrespective to, any modification, limitation or discharge of the liability of
the Borrower, the Guarantor or any obligor under the Loan Agreement, that may
result from such proceedings.

4. The Guarantor hereby unconditionally, irrevocably and expressly waives:

A. presentment and demand for payment of the principal or of the
interest under the Loan and protest of non-payment;

B. notice of acceptance of this Agreement and of presentment, demand
and protest thereof;
<PAGE>

C. notice of any default hereunder or under the Loan Agreement and
notice of all indulgences except such notices as are specifically provided for
in this Agreement;

D. demand for observance, performance or enforcement of any of the
terms or provisions of this Agreement or the Loan Agreement;

E. any right or claim of right to cause a marshalling of the assets
of the Borrower; and

F. all other notices and demands otherwise required by law which the
Guarantor may lawfully waive.

5. In the event the Lender shall commence any action or proceeding for the
enforcement of this Agreement, then the Guarantor will reimburse the Lender,
promptly upon demand, for any and all expenses incurred by the Lender in
connection with such action or proceeding including, without limitation,
reasonable attorney's fees together with interest thereon.

II. Representation and Warranties

1. The Guarantor:

A. is duly organized, validly existing and in good standing under the
laws of the State of its organization;

B. has the power and authority to own its properties and to carry on
its business as now being conducted;

C. is qualified to do business in every jurisdiction in which the
nature of its business or its properties makes such qualification necessary; and

D. is in material compliance with all laws, regulations, ordinances
and orders of public authorities applicable to it.

2. The execution, delivery and performance by the Guarantor of this
Agreement (a) is within the powers of the Guarantor; (b) has been duly
authorized by all requisite action of the Guarantor; (c) has received all
necessary governmental and other approvals; and (d) will not violate any
provision of law, any order of court or other agency of government, the articles
of incorporation or by-laws of the Guarantor or any indenture, agreement or
other instrument to which the Guarantor is a party or by which the Guarantor or
any of its property is bound or be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement, or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of their property or assets except as contemplated in this Agreement.

III. Affirmative Covenants

1. The Guarantor will do any and all things necessary to preserve and keep
in full force and effect its existence, franchises, rights, privileges and trade
names as a corporation under the
<PAGE>

laws of the State of its incorporation and in every jurisdiction in which the
nature of its business or its properties makes qualification to do business
necessary.

2. The Guarantor will make, execute, acknowledge and deliver all and every
such further acts and assurances as the Lender shall from time to time require
for confirming or carrying out the intentions or facilitating the performance of
the terms of this Agreement.

IV. Miscellaneous

1. In the event any provision of this Agreement (or any part of any
provision) is held by a court of competent jurisdiction to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision (or remaining part of the
affected provision) of this Agreement; but this Agreement shall be construed as
if such invalid, illegal, or unenforceable provision (or part thereof) had not
been contained in this Agreement, but only to the extent it is invalid, illegal,
or unenforceable.

2. All of the grants, covenants, terms, provisions and conditions of this
Agreement shall inure to the benefit of, and be enforceable by, the Lender and
its successors and assigns, and shall be binding upon, and enforceable against,
the Guarantor and its successors and assigns.

3. No modification or waiver of any provision of this Agreement shall in
any event be effective unless the same shall be in writing, and then such waiver
or consent shall be effective only in the specific instance and for the purposes
for which given. None of the terms or provisions of this Agreement shall be
deemed to have been abrogated or waived by reason of any failure or failures to
enforce the same or by any course of conduct by the Lender.

4. The captions and headings contained in this Agreement are included
herein for convenience of reference only and shall not be considered a part
hereof and are not in any way intended to define, limit or enlarge the terms
hereof.

5. This Agreement may be executed in any number of counterparts, each of
which shall be considered an original for all purposes; provided, however, that
all such counterparts shall together constitute one and the same instrument.

6. This Agreement shall be governed by the laws of the Commonwealth of
Virginia.

7. All notices, demands, requests and other communications required
pursuant to the provisions of this Agreement shall be in writing and shall be
deemed to have been properly given or served for all purposes when delivered by
hand, or sent by overnight courier or by certified mail, postage prepaid, return
receipt requested, to the respective addresses as follows:

(a) If to Lender:

Scott & Stringfellow,Inc.
909 East Main Street
<PAGE>

Richmond, VA 23219
Attention: Steven DeLaney

(b) If to Guarantor:

WorldCorp, Inc.
13873 Park Center Road
Herndon, VA 22071
Attention: General Counsel

Any of the parties hereto may designate a change of address by notice in writing
to the other parties. Whenever in this Agreement the giving of notice by mail
or otherwise is required, the giving of such notice may be waived in writing by
the person or persons entitled to receive such notice.

8. This Agreement shall be a continuing one and shall be binding upon the
Guarantor regardless of how long before or after the date hereof any of the
obligations and liabilities were or are incurred. This Agreement shall end on
the date when, after termination of the Loan in accordance with the provisions
thereof, there shall be no obligations or liabilities under this Agreement
outstanding.

WITNESS the signature and seal of an authorized officer of the Guarantor as
of the day and year first above written.

WITNESS (OR ATTEST): WORLDCORP, INC.

_________________________ By:__________________________
T. Coleman Andrews
Chief Executive Officer and
President

STATE/COMMONWEALTH OF VIRGINIA
COUNTY/CITY OF FAIRFAX, TO WIT:

I HEREBY CERTIFY, that on this ____ day of January, 1995, before me, a
Notary
<PAGE>

Public of said State/Commonwealth, personally appeared T. Coleman Andrews, III,
who acknowledged himself to be the Chief Executive Officer and President of
WorldCorp, Inc., a Delaware corporation, known to me to be the person whose name
is subscribed to the foregoing instrument and acknowledged that he executed the
same for the purposes therein contained as the fully authorized Chief Executive
Officer and President of said corporation by signing the name of the corporation
by himself as Chief Executive Officer and President.

WITNESS my hand and Notarial Seal.

_____________________________
Notary Public

My commission expires:

<PAGE>
EXHIBIT 10.112

WORLDCORP, INC.

-------------------------------------

REGISTRATION RIGHTS AGREEMENT

-------------------------------------

January 11, 1995
<PAGE>

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT, dated as of
January 11, 1995, by and between WORLDCORP, INC., a Delaware corporation (the
"Company"), and SCOTT & STRINGFELLOW INC. (the "Lender").

WHEREAS, the Lender has made a term loan in the amount of approximately
$1,350,000 (the "Loan") to WORLDCORP EMPLOYEE SAVINGS AND STOCK OWNERSHIP TRUST
(the "Borrower"), which Loan is (i) secured by a pledge by the Borrower to the
Lender of an aggregate of 361,401 shares of Common Stock of the Company owned of
record by the Borrower (the "Pledged Shares") and (ii) guaranteed by the
Company; and

WHEREAS, as a condition to the making of the Loan by the Lender to the
Borrower, the Company has agreed to file a registration statement on Form S-3
(the "Registration Statement") with the Securities and Exchange Commission (the
"SEC") pursuant to the Securities Act of 1933, as amended (the "Act"); and

WHEREAS, the parties hereto wish to set forth certain agreements and
understandings regarding the Registration Statement and the registration rights
that have been granted to the Lender;

NOW, THEREFORE, the parties hereto agree as follows:

1. Definition. For purposes of this Agreement, the term "Registrable
----------
Securities" means (i) the Pledged Shares, and (ii) any securities issued or
issuable as a dividend or other distribution with respect to any of the Pledged
Shares; provided, however, that as to any particular security or securities that
-------- -------
are contained in the Registrable Securities, such securities shall cease to be
Registrable Securities when (i) they are released from the pledge in favor of
the Lender, (ii) they have been sold in accordance with the Registration
Statement or (iii) they have been sold to the public pursuant to Rule 144 (or
any successor provision) under the Act.

2. Obligations of the Company. The Company agrees:
--------------------------

2.1. To keep the Registration Statement effective for so long as there
remain any Registrable Securities.

2.2. To promptly prepare and file with the SEC such amendments to the
Registration Statement and such supplements to any prospectus or preliminary
prospectus included in the Registration Statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of any
<PAGE>

or all of the Registrable Securities, and to use its best efforts to have any
such amendment declared effective by the SEC.

2.3. To furnish to the Lender such numbers of copies of any prospectus or
preliminary prospectus included in the Registration Statement and such other
documents as the Lender may reasonably request in order to facilitate the
disposition of the Registrable Securities.

2.4. To use its best efforts to register and qualify the Registrable
Securities under the securities or "Blue Sky" laws of such jurisdictions as
shall be reasonably requested by the Lender; provided, however, that the Company
-------- -------
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such jurisdiction.

3. Obligations of the Lender. The Lender agrees:
-------------------------

3.1. That the information furnished by it to the Company regarding
itself, the number of Registrable Securities pledged to or held by it, and the
intended method of disposition of the Registrable Securities was and is true and
correct and will be updated by the Lender to the Company as necessary in order
to enable the Company to maintain the effectiveness of the Registration
Statement.

3.2. Not to make any sale of the Registrable Securities without causing
its prospectus delivery requirements under the Act to be satisfied.

3.3. To notify the Company promptly (and in any event a reasonable time
in advance of any sale) in the event the Lender enters into any material
arrangement with any broker-dealer or other underwriter with respect to the
Registrable Securities or otherwise plans to offer or sell any of the
Registrable Securities in a manner that would require the prospectus included in
the Registration Statement to be supplemented or the Registration Statement to
be amended.

3.4. That there may occasionally be periods (each, a "black-out period")
when the Company must suspend the use of the prospectus included in the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the SEC or
until such time as a supplement to such prospectus has been prepared and filed
with the SEC, or until such time as the Company has filed an appropriate report
with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"). The Company will use its best efforts to prevent any black-out
period from exceeding 10 days. The Lender hereby covenants that

- 2 -
<PAGE>

it will not sell any Registrable Securities pursuant to said prospectus during
any black-out period. A black-out period shall be deemed to commence at the
time the Company gives the Lender notice of the suspension of the use of such
prospectus and to end at the time the Company gives the Lender notice that the
Lender may thereafter effect sales pursuant to such prospectus.

4. Registration Expenses. All expenses, other than underwriting discounts
---------------------
and commissions, incurred in connection with the registration of the Registrable
Securities, including, without limitation, all registration, filing and
qualification fees, accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of one counsel for the Lender
shall be borne by the Company.

5. Indemnification.
---------------

5.1. The Company agrees to indemnify and hold harmless the Lender and its
officers and directors, any underwriter (as defined in the Act) of the
Registrable Securities and each person, if any, who controls the Lender or such
underwriter within the meaning of the Act or the 1934 Act (each, an
"Indemnitee"), against any losses, claims, damages or liabilities (or actions in
respect thereof) to which they may become subject under the Act, the 1934 Act,
any state securities law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively, a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or prospectus contained therein or any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act or the 1934 Act or any state securities law; and the
Company will pay to each such Indemnitee, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the indemnity agreement contained in this Section 5.1 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information

- 3 -
<PAGE>

furnished expressly for use in connection with such registration by any such
Indemnitee.

5.2. The Lender agrees to indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the Registration Statement,
each person, if any, who controls the Company within the meaning of the Act or
the 1934 Act, any underwriter, and any controlling person of any underwriter
against any losses, claims, damages or liabilities (joint or several) (or
actions in respect thereof) to which any of the foregoing persons may become
subject under the Act, the 1934 Act, any state securities law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by the Lender expressly for use
in connection with the Registration Statement; and the Lender will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 5.2 in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that the indemnity agreement contained in this Section 5.2 shall not
-------
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Lender,
which consent shall not be unreasonably withheld; provided, further, however,
-------- ------- -------
that, in no event shall any indemnity under this Section 5.2 exceed the gross
proceeds from such registration received by the Lender.

5.3. Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties, provided,
--------
however, that an indemnified party (together with all other indemnified parties
-------
that may be represented without conflict by one counsel) shall have the right to
retain one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to

- 4 -
<PAGE>

defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section to the extent of such prejudice, but
the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section.

5.4. The obligations of the Company and the Lender under this Section
shall survive the completion of any offering of Registrable Securities under
this Agreement.

6. Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.

7. Titles and Subtitles. The titles and subtitles used in this Agreement
--------------------
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.

8. Notices. Unless otherwise provided, any notice required or permitted
-------
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon deposit with a
reputable overnight courier or with the United States Post Office, by registered
or certified mail, postage prepaid and addressed to the party to be notified at
the principal executive office of such party, or at such other address as such
party may designate by ten (10) days' advance written notice to the party to be
notified.

9. Governing Law. This Agreement shall be governed by and construed under
-------------
the laws of the State of New York without regard to conflicts of law principles.

10. Severability. If one or more provisions of this Agreement are held to
------------
be unenforceable under applicable law, such provisions shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

- 5 -
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

WORLDCORP, INC.

By:
------------------------------
T. Coleman Andrews, III
Chief Executive Officer and
President

SCOTT & STRINGFELLOW
INVESTMENT CORP.

By:
------------------------------
Steven C. DeLaney
First Vice President and
Chief Financial Officer

- 6 -

<PAGE>
EXHIBIT 10.113

January 11, 1995

Mr. William F. Gorog, Trustee
WorldCorp Employee Savings and Stock
Ownership Trust
13873 Park Center Road
Herndon, VA 22071

Re: Commitment to Make Contributions

Dear Mr. Gorog:

This letter sets forth WorldCorp, Inc.'s commitment to make contributions
to the WorldCorp Employee Savings and Stock Ownership Plan (the "ESSOP"), for
the duration of the Scott & Stringfellow loan to the ESSOP, under the following
circumstances and to the following extent:

1. To the extent there is, or the ESSOP anticipates, an event of
default pursuant to the terms of the Loan Agreement with Scott &
Stringfellow, WorldCorp agrees to make a loan or a contribution, in
its discretion, adequate to avoid an event of default;

2. To the extent the margin requirements of the Loan Agreement with
Scott & Stringfellow would be or are violated by the release of
shares for participants' accounts as required by section 6(d)(1) of
the ESSOP, WorldCorp agrees to make contributions to the extent
necessary to satisfy the margin requirements.

WorldCorp reserves the right, in the event the entire loan becomes due and
payable in the event of default, to seek a substitute lender for the ESSOP or
become such substitute lender.

WORLDCORP, INC.

By:
-------------------------------
T. Coleman Andrews, III
Chief Executive Officer and
President

<PAGE>

EXHIBIT 10.114

STRATEGIC ALLIANCE AGREEMENT
----------------------------

THIS STRATEGIC ALLIANCE AGREEMENT is made as of the 16th day of January 1995
by and between COLONIAL DATA TECHNOLOGIES CORP., a Massachusetts corporation
with its principal place of business at 80 Pickett District Road, New Milford,
Connecticut 06776 ("CDT ") and US ORDER ("US Order"), a Delaware corporation
with its principal place of business at 13873 Park Center Road, Suite 353,
Herndon, Virginia 22071.

WHEREAS, CDT and US Order desire to enter into an agreement to create a
strategic alliance between the two companies and to provide a framework for
mutual cooperation for the development, production, marketing and maintenance of
certain telecommunications products, as more particularly set forth below.

NOW THEREFORE, in consideration of the mutual covenants and promises set forth
herein, and for other good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties hereto agree as follows:

AGREEMENT
---------

1. Definitions. As used in this Agreement, the following terms shall have
-----------
the following definitions:

1.1 ADSI. "ADSI" shall mean Analog Display Services Interface.
----

1.2 ADSI Terminal. "ADSI Terminal" shall mean a screen-based telephone or
-------------
other telecommunications device which incorporates ADSI technology including the
so-called smart telephones.

1.3 Affiliate. "Affiliate" shall mean any person or company holding,
---------
directly or indirectly, more than a 10% equity interest in either CDT or US
Order or any company or business organization for which either CDT or US Order,
directly or indirectly, holds more than a 10% equity interest.

1.4 Agreement. "Agreement" shall mean this Strategic Alliance Agreement and
---------
any amendments and supplements thereto.

1.5 AT&T License. "AT&T License" shall mean the Technical Information and
------------
Patent License Agreement between American Telephone and Telegraph Company and
CDT, effective as of August 1, 1987.

1.6 Caller ID Units. "Caller ID Units" shall mean a telephone or adjunct
---------------
device which permits the user to view the number or name and number of the
calling party.

1.7 Customer. "Customer" shall mean any purchaser or lessee of ADSI
--------
Terminals, including Telecommunication Companies or other third parties
purchasing or leasing products for or on behalf of their customers.

- 1 -
<PAGE>

1.8 Existing Products. "Existing Products" shall mean the Phone Plus
-----------------
product currently being marketed by US Order.

1.9 Falcon. "Falcon" shall mean the ADSI Terminal currently under
------
development by US Order and scheduled for introduction into the marketplace
during 1995.

1.10 Proprietary Information. "Proprietary Information" shall mean all ideas
-----------------------
relating to each party's technology, marketing, implementation and systems
designs for Telecommunications Products, including, without limitation, patents,
trade secrets, plans, specifications, blueprints, prototypes, working models,
production models and marketing plans.

1.11 Repair and Refurbishment Services. "Repair and Refurbishment Services"
---------------------------------
shall mean the repair and refurbishment services to be provided to US Order by
CDT on a contract basis, as more particularly described in Section 8.

1.12 Service Applications. "Service Applications" shall mean application
--------------------
content provided by US Order for ADSI Terminals from time to time. Service
Applications currently provided by US Order are identified on Annex A.

1.13 Telecommunication Companies. "Telecommunication Companies" shall mean
---------------------------
the Regional Bell Operating Companies and all other companies whose primary
business consists of providing local, long-distance and cellular telephone
services.

1.14 Telecommunications Products. "Telecommunications Products" shall mean
---------------------------
either Caller ID Units or ADSI Terminals.

2. Mutual Cooperation. CDT and US Order agree to use their best efforts to
------------------
develop an ongoing business relationship between the two organizations to cover
Telecommunications Products which incorporate ADSI technology. In furtherance of
this objective, senior executives from both organizations shall meet from time
to time to review the relationship and to exchange information regarding future
plans and to discuss specific ways to expand the business relationship between
CDT and US Order.

3. Technical Assistance. CDT and US Order agree that during the term of
--------------------
this Agreement they shall cooperate fully and exclusively to provide technical
assistance to the other with regard to the development of Telecommunications
Products using ADSI technology and improvements thereto. It is the intent of the
parties that each will contribute its technical strengths at its own costs. CDT
will focus its technical, operation and manufacturing resources in such areas as
certification (FCC, UL, Bellcore, et.al.), testing, molding, cost reduction and
other manufacturing oriented areas, as well as Caller ID and enhanced Caller ID.
US Order will focus its technical and developmental resources in such areas as
ADSI, circuit board design, user interface, plastics, operating systems and
application software. The parties also agree to readily provide incidental
technical

- 2 -
<PAGE>

assistance to the other at no charge, pursuant to the mutual goals contemplated
in this Agreement. In the event that either party decides to utilize the other
party, and the other party agrees, for a specific and material technical project
beyond the scope contemplated by this Agreement, the parties will jointly agree
on the definition and scope of the project and the compensation payable to the
party providing the services.

4. Manufacture of ADSI Terminals. During the term of this Agreement, US
-----------------------------
Order agrees that CDT shall act as exclusive sourcing agent for the manufacture
of ADSI Terminals for Telecommunication Companies in sufficient quantities, at
appropriate quality standards, in a timely manner and at competitive prices, it
being understood, however, that the foregoing shall not apply to Existing
Products. In recognition of the foregoing, CDT agrees that during the term of
this Agreement neither it nor any Affiliate will manufacture, distribute or
market ADSI Terminals for itself or any third party; provided, however, that the
foregoing restriction shall become effective only after US Order has authorized
manufacture of the Falcon (or a comparable product) for general, commercial
distribution. While the two parties acknowledge that it will not be possible to
select a manufacturer of ADSI Terminals until further progress is achieved on
development of the Falcon, they are prepared to confirm their understanding
that, among other possible manufacturers, Verifone Incorporated (the current
manufacturer of US Order's Phone Plus product) and STL (the current manufacturer
of CDT's Caller ID products) will be afforded a fair and reasonable opportunity
to bid on such manufacturing contract.

5. Sublicense of Caller ID Technology. During the term of this Agreement,
----------------------------------
CDT shall grant a sublicense to US Order of the right to use Caller ID
technology granted to it pursuant to the AT&T License Agreement for utilization
in the Falcon or other ADSI Terminals or similar improvement to US Order's
Existing Products. While it is the intention of the parties to execute and
deliver a separate sublicense agreement which contains more detailed information
concerning the terms and conditions of the sublicense, the parties agree that
the sublicense fee payable by US Order to CDT shall be (a) $1.50 for each unit
for the first 100,000 units subject to the sublicense, (b) $0.75 for each unit
for the next 150,000 units, and (c) $0.50 for each unit above 250,000 units.
Further, US Order agrees to abide by all of the applicable terms and conditions
of the AT&T License Agreement. It is the intention of the parties that the
sublicense fee payable by US Order to CDT shall be at a level of 50% of the
standard royalty arrangement granted by AT&T to third parties. Said license
fees described above shall be automatically adjusted from time to time to
reflect any changes in the royalties charged by AT&T.

6. Exclusive Marketing Arrangement to Telecommunication Companies. During
--------------------------------------------------------------
the term of this Agreement, CDT shall have the exclusive right to market ADSI
Terminals and Existing Products to Telecommunication Companies, which effort
shall be coordinated with US Order; provided, however, that as to Existing
Products the foregoing shall become effective only after US Order has authorized
manufacture

- 3 -
<PAGE>

of the Falcon (or a comparable product) for general, commercial distribution. In
furtherance of this objective, senior marketing executives from both
organizations shall meet as frequently as necessary (but no less frequently than
quarterly) to exchange information and coordinate marketing and sales efforts to
Telecommunication Companies. In recognition of the extensive ADSI Terminal
developmental activities undertaken or to be undertaken by US Order, CDT shall
pay US Order a royalty equal to 10% of the sale or lease price per unit sold or
leased by CDT or any Affiliate in accordance with this Section 6. This royalty
shall be subject to good faith renegotiation by either party for sales or leases
made on or after January 1, 1998 and on each January 1 thereafter.

7. Exclusive Marketing Arrangement to Customers Other than Telecommunication
-------------------------------------------------------------------------
Companies. Subject to the provisions of Section 12, during the term of this
---------
Agreement, US Order shall have the exclusive right to market ADSI Terminals to
all Customers other than Telecommunication Companies. However, in recognition
of the extensive experience with the development and distribution of Caller ID
products, the ADSI Terminal developmental activities to be undertaken by CDT and
CDT's commitment to source manufacturing of ADSI Terminals (as described in
Section 4), US Order shall pay CDT a royalty equal to 10% of the sale or lease
price per unit sold or leased by US Order or any Affiliate to Customers other
than Telecommunication Companies in accordance with this Section 7, it being
understood by both parties that such royalty shall be payable whether or not CDT
directly or indirectly manufactures such products. This royalty shall be
subject to good faith renegotiation by either party for sales or leases of such
ADSI Terminals made on or after January 1, 1998 and on each January 1st
thereafter.

8. Repair and Refurbishment Services. During the term of this Agreement, US
---------------------------------
Order agrees that for so long as CDT has the capacity to provide such repair and
refurbishment services in a timely manner, at competitive prices and in
compliance with standards established and maintained by US Order and its
customers, US Order shall afford CDT the opportunity to serve as the primary
repair and refurbishment facility for all ADSI Terminals (other than Existing
Products) sold or leased by US Order, whether in or out of warranty, on a right
of first refusal basis. Prior to October 1, 1995, CDT shall provide its
schedule of prices for such repair and refurbishment services for calendar year
1996, and thereafter CDT shall update its price schedule for each succeeding
calendar year not later than the immediately preceding October 1st.

9. Customer Service Support. During the term of this Agreement, the two
------------------------
parties agree to explore ways in which both companies' customer service support
resources can be applied to support the other's efforts to expand and maintain
the customer base for ADSI Terminals which are the subject matter of this
Agreement. The two parties, if they agree that their customer service support
resources can be so applied, will negotiate in good faith to reach a mutually
satisfactory compensation arrangement.

- 4 -
<PAGE>

10. Leasing. In recognition of the leasing expertise and experience of CDT,
-------
US Order understands that CDT is interested in leasing ADSI Terminals to
Customers other than Telecommunication Companies and undertakes to explore with
such Customers ways in which CDT can play a role in such leasing activities. It
is understood, however, that the foregoing shall not be construed to in any way
obligate US Order to involve CDT in leasing activities for Customers other than
Telecommunication Companies if its Customers are not interested in having CDT
participate or US Order determines in good faith that CDT's participation would
not be in the best interests of its business or its relationship with its
Customers.

11. Exclusive Marketing of Service Applications. During the term of this
-------------------------------------------
Agreement, US Order shall make available exclusively to CDT on a wholesale basis
(and on terms no less favorable than those available to third parties), and CDT
shall purchase exclusively from US Order such Service Applications as US Order
makes available from time to time for redistribution by CDT to Telecommunication
Companies and their Customers. Notwithstanding the foregoing, the parties
acknowledge that CDT shall be free to deal directly with VISA Interactive for
home banking and other financial service applications. In such event, CDT agrees
to keep US Order apprised of the timing, nature and substance of such contact.
Prices and payment terms will be the same as those generally afforded by US
Order to third parties.

12. Retail Distribution of ADSI Terminals. Both parties acknowledge that it
-------------------------------------
is not their intention that the initial focus for distributing ADSI Terminals
shall be through retail distribution channels. However, they acknowledge that
such channels may in the future emerge to become important. In such event, US
Order shall offer CDT the first opportunity to be the exclusive distributor of
ADSI Terminals through retail distribution channels. The two parties shall
negotiate in good faith to arrive at mutually agreeable terms to cover their
relationship in such distribution channels, it being understood that if such
negotiations are not successful US Order shall be free to use third parties for
retail distribution.

13. Relationship of Parties. The relationship of US Order and CDT under
-----------------------
this Agreement is that of independent contractors and that relationship shall
continue as such throughout the term of this Agreement and any extension
thereof. It is further agreed that nothing contained in this Agreement shall be
construed to constitute either party as a partner or agent of the other.

14. Payment Terms. Except as otherwise specified, payment under this
-------------
Agreement shall be made monthly, within thirty (30) days of the close of a
calendar month. All payments hereunder shall be made in U.S. dollars.

15. Term of Agreement. This Agreement shall become effective as
-----------------
of January 17, 1995 and shall continue in full force and effect for five (5)
years unless terminated prior thereto in accordance with this

- 5 -
<PAGE>

Section. Thereafter, the Agreement shall be renewed automatically for
succeeding one (1) year terms, unless either party provides written

notice of non-renewal not later than one hundred twenty (120) days prior to the
scheduled expiration date. Notwithstanding the provisions set forth above, this
Agreement may be terminated pursuant to any of the following terms and
conditions:

15.1 Amendment or Termination by Mutual Consent. This Agreement may be
------------------------------------------
amended or terminated at any time upon the mutual written consent of the parties
hereto.

15.2 Termination for Breach. This Agreement may be terminated by either
----------------------
party immediately upon written notice to the other party in the event that the
other party shall have breached any material term of this Agreement and shall
have failed to remedy such material breach to the non-breaching party's
reasonable satisfaction within thirty (30) days of receiving written notice
thereof from the non-breaching party specifying the nature of the breach.

15.3 Other Terminations. Either party hereto may terminate this Agreement
------------------
immediately upon written notice to the other party in the event that the other
party (i) files a petition of any type as to its bankruptcy, (ii) is declared
bankrupt, (iii) becomes insolvent, (iv) makes an assignment for the benefit of
its creditors, or (v) goes into liquidation or receivership. In addition, CDT
may terminate this Agreement upon ninety (90) days' prior written notice if the
Falcon or similar improvement to US Order's Existing Products are not available
for commercial distribution by April 1, 1996, and US Order may terminate this
Agreement upon ninety (90) days' prior written notice if CDT ceases to
distribute Telecommunications Products to at least four Telecommunication
Companies during any twelve-month period.

16. Nonsolicitation of Employees. During the term of this Agreement,
----------------------------
neither party to this Agreement shall solicit employees of the other party
without the other party's prior written authorization.

17. Confidentiality. During the term of this Agreement and any renewals
---------------
thereof, and for a period of two (2) years thereafter, any party receiving
Proprietary Information hereunder shall prevent the disclosure thereof to any
third person or party by maintaining such Proprietary Information in strictest
confidence. In addition, the receiving party shall not, during the term hereof
and any renewals thereof, and for a period of two (2) years thereafter, use any
Proprietary Information for any purpose other than as specifically set forth in
this Agreement, and in no event shall either party use such information to the
detriment of the other party to this Agreement. As contemplated in Section 4
above, third parties may be selected by US Order to source the manufacture of
ADSI Terminals for Customers other than Telecommunication Companies. In such
event, US Order shall (a) require each third party to execute confidentiality
agreements obligating them to hold Proprietary Information in strictest
confidence, (b) limit use of such Proprietary Information to manufacture ADSI
Terminals and (c) exclude the use of such Proprietary Information to either
directly or indirectly manufacture or distribute Caller ID products.

- 6 -
<PAGE>

18. Publicity. The parties agree that all publicity relating to this
---------
Agreement and the transactions contemplated hereunder shall be subject to prior
approval by both parties hereto.

19. Exchange of Securities. It is the intention of the parties to this
----------------------
Agreement to acquire up to a 5% equity interest in the other party. However,
each party recognizes the complexity of issues such as valuation of such
securities and the structure of such a transaction. Accordingly, they have
agreed to proceed with the execution and delivery of this Agreement, with the
understanding that each party will endeavor to negotiate in good faith to arrive
at a mutually satisfactory basis for exchanging securities in a manner which
will serve to strengthen the strategic alliance between the two companies. It
shall be the goal of the parties to reach agreement not later than March 31,
1995.

20. General Terms and Conditions.
----------------------------

20.1 Amendment. Any amendment, modification, extension, revision or waiver
---------
of any term of this Agreement shall be valid and binding only if in writing and
duly executed by both parties hereto.

20.2. Entire Agreement. This Agreement, together with the Attachments hereto
----------------
and made an integral part hereof by this reference, sets forth the entire
agreement and understanding between the parties hereto relating to the subject
matter hereof and merges all prior oral and written understandings, discussions
and negotiations between them.

20.3 Governing Laws. The law of the State of New York shall govern all
--------------
questions concerning construction, validity and interpretation of this Agreement
and performance of the obligations thereunder.

20.4 Severability. The decision of any court of law or other governmental
------------
authority invalidating any portion of this Agreement shall not affect the
validity of any remaining portion. The remaining portion shall continue in full
force and effect as if the invalid portion were not a part of this Agreement
when it was executed. In the event that the severance of any portion of this
Agreement materially affects any of the material rights and obligations of the
parties hereunder, the parties hereto will negotiate in good faith to amend this
Agreement in a manner satisfactory to the parties. If the parties are unable to
agree to amend this Agreement in a manner satisfactory to the parties, they may
terminate this Agreement under a mutually agreed to phase-out plan with
sufficient lead times to avoid inequity to any party.

20.5 Waiver. The failure of either party hereto to require performance by
------
the other party of any provision of this Agreement shall in no way affect the
right of such party to subsequently require performance of this provision. The
failure of either party to assert a right in respect of a breach hereunder by
the other party shall not be deemed to be a waiver of such breach or of any
continuing or succeeding breach or any right under this Agreement.

- 7 -
<PAGE>

20.6 Counterparts. This Agreement may be executed in two (2) or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one (1) and the same instrument.

20.7 Notices. All notices required or permitted to be given hereunder shall
-------
be in writing and shall be deemed to have been duly given on the date of
dispatch if sent by telefax or delivered personally, or three (3) business days
after the date of dispatch if mailed first class, postage prepaid by registered
or certified mail as follows:

US Order: CDT:
13873 Park Center Road Colonial Data Technologies Corp.
Suite 353 80 Pickett District Road
Herndon, Virginia 22071 New Milford, Connecticut 06776
Attn: John C. Backus Attn: Robert J. Schock
Scott A. Corzine

With a Copy to:
US Order
1120 Avenue of the Americas
4th Floor
New York, New York 10036
Attn: Scott A. Corzine

Either party hereto may notify the other party in the manner set forth above of
any other address to which notices shall be addressed to it hereunder.

20.8 Assignment. Neither party shall assign or transfer any of its rights or
----------
obligations under this Agreement except with the prior written consent of the
other, and this Agreement shall be binding on the successors and assigns of each
party hereto.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.

US ORDER COLONIAL DATA TECHNOLOGIES CORP.

By: By:
---------------------------- ----------------------------

Title: Title:
-------------------------- --------------------------

- 8 -
<PAGE>

Annex A

Service Applications

Currently planned as of the execution date of this Agreement:

Universal Catalog Shopping

Universal Catalog Shopping allows users to order from any of thousands of mail
order catalogs, anytime - 24 hours a day, 7 days a week. Customers enjoy the
ease, security, accuracy and time savings of ordering electronically. They
shop at their own pace with no busy signals, waiting on hold, or repeating
order, address and payment information. The simple intuitive interface makes
shopping fast and easy; the built-in card reader allows consumers to pay for
their purchases with maximum security. Gift giving is facilitated with one-
button address selection from the Personal Directory. Customers may also
request catalogs using the application.

Universal Directory Assistance

Customers can retrieve and store nationwide Directory Assistance information
from a single source with the touch of a few keys. They can access this
service at a significant discount from the cost charged by their local
telephone company or a long distance Directory Assistance operator. Users do
not have to know the exact city and area code. The powerful database returns
the information from complete and up-to-date national sources in seconds. Then
the customer may autodial the phone number or add it to their Personal
Directory - with just a few keystrokes.

Data Save

To safeguard against the possibility of unforeseen data loss and to ensure
that customers will enjoy peace of mind, US Order stores all important data -
personal directory entries, banking infor-mation and personal reminders - in
its host computer. With a few keystrokes, data is uploaded to our facility and
can be quickly and easily restored if necessary. Security is maintained by
requiring a valid customer ID and password to initiate a download.

Currently planned for implementation in 1995/96:

FedEx Shipment Tracking Personal Information Services
Prepaid Discount Long Distance Home Office Information Services
Paging Email
TDD

<PAGE>
EXHIBIT 10.115

AMENDMENT NO. 2
---------------
TO
--
PASSENGER AIRCRAFT SERVICES
---------------------------
AND
---
FREIGHTER AIRCRAFT SERVICES AGREEMENTS
--------------------------------------

THIS AMENDMENT NO. 2 TO PASSENGER AIRCRAFT SERVICES AGREEMENT AND FREIGHTER
AIRCRAFT SERVICES AGREEMENT (as such terms are defined below) is entered into
this 9th day of February 1995, by and between World Airways, Inc., a Delaware
corporation ("World" or "World Airways") and Malaysian Airline System Berhad, a
Malaysian corporation ("MAS").

WHEREAS, World Airways and MAS are parties to that certain Passenger
Aircraft Services Agreement (the "Passenger Services Agreement") dated September
26, 1994, pursuant to which MAS wet leased two (2) MD-11 passenger aircraft from
World Airways for a term (the "Passenger Lease Term") commencing September 27,
1994 and expiring March 31, 1995; and

WHEREAS, World Airways and MAS are also parties to that certain Freighter
Aircraft Services Agreement (the "Freighter Services Agreement") dated October
6, 1994, which Freighter Services Agreement novated the earlier Freighter
Services Agreement between the parties, pursuant to which MAS committed to
leasing two (2) MD-11 aircraft from World Airways to be used by MAS in freighter
configuration, for a term beginning on June 15, 1994 and expiring September 30,
1999 (the "Freighter Lease Term"); and

WHEREAS, as of December 31, 1994, the parties entered into Amendment No.1
("Amendment No. 1") to the Passenger Services and Freighter Services Agreements
(the Passenger Services Agreement and the Freighter Services Agreement, as
amended by Amendment No. 1, and as further amended by this Amendment No. 2,
being hereinafter referred to collectively as the "Agreement"); and

WHEREAS, the parties desire to further amend Amendment No. 1 in certain
respects, and to agree to certain other terms and conditions of their
relationship.

NOW, THEREFORE, in consideration of the foregoing and other mutual
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree to further amend Amendment No. 1 as follows:

1. Delete Section 2 of Amendment No.1 in its entirety and substitute the
following new Section 2 in lieu thereof:

"2. Freighter Activities.
--------------------

2.1 MAS agrees to wet lease three (3) MD-11 freighter or convertible
freighter aircraft from World Airways for the following terms:
<PAGE>

Aircraft No. 1 - 15 June 1994 to 30 September 1999

Aircraft Nos. 2 & 3 - Approximately 15 June 1995 to 30
September 2000*

*Note: Delivery of Freighter Aircraft Nos. 2 & 3 to MAS
----
shall occur after the last Hadj flight of 1995.

2.2 The block hour rate for each of the above cargo aircraft shall be
adjusted effective 1 January 1995 to not less than USD $4,600 per block
hour.

2.3 Except as set forth above with respect to the lease term for
Freighter Aircraft No. 3, the lease terms for Freighter Aircraft No. 3
shall be on the same terms and conditions as set forth in the Freighter
Services Agreement with respect to Freighter Aircraft Nos. 1 & 2.

2.4 World Airways and MAS will collaborate to the maximum extent
possible to use their respective rights and other capabilities to build a
successful worldwide cargo system. To accomplish this objective, MAS and
World Airways will in every respect accord each other "most favored nation"
status."

2. Delete Section 3.1 of Amendment No. 1 in its entirety and substitute the
following new Section 3.1 in lieu thereof:

"3.1 MAS agrees to wet lease two (2) MD-11 passenger aircraft from
World Airways for use in MAS' operations on the same terms and
conditions set forth in the Passenger Services Agreement, as amended
by Amendment No. 1 thereto, except that: (1) the lease term for the
two (2) MD-11 passenger aircraft shall run from 1 January 1995 to 15
March 1997; and (2) effective 1 January 1995, the rate to be paid by
MAS for the two (2) passenger MD-11 aircraft leased from World Airways
shall be the existing Umrah rate of $5,400 per block hour."

3. Delete Section 3.2 in its entirety and substitute the following new Section
3.2 in lieu thereof:

"3.2 MAS agrees to use its best efforts to release the 2 passenger
MD-11 aircraft leased from World Airways for Hadj operations during
each Hadj period occurring during the term of the Passenger Services
Agreement, as extended hereby."

4. Sections 3.3, 3.4 and 3.5 of Amendment No. 1 are hereby deleted in their
entirety.

2
<PAGE>

5. Except as amended hereby, all of the terms and conditions set forth in
the Passenger Service Agreement and in the Freighter Services Agreement, as
amended by Amendment No. 1 thereto, shall remain the same and in full force
and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be executed as of the day and year first-above written.

WORLD AIRWAYS, INC.

By:_______________________________________

Name:_____________________________________

Title:____________________________________

MALAYSIAN AIRLINE SYSTEM BERHAD

By:_______________________________________

Name:_____________________________________

Title:____________________________________

disk loc. drew7
file loc. amend

<PAGE>

EXHIBIT 11.1

WORLDCORP, INC. AND CONSOLIDATED SUBSIDIARIES

CALCULATION OF EARNINGS (LOSS) PER COMMON SHARE
(in thousands except share data)

1994 1993 1992
-------------- ------------- -------------
<S> <C> <C> <C>

Earnings (loss) before
extraordinary item
and change in accounting principle $ 8,308 $ (30,945) $ (42,891)
Extraordinary item -- -- (3,253)
Change in accounting principle -- -- (1,973)
----------- ------------ -----------

Net earnings (loss) applicable to
common stock $ 8,308 $ (30,945) $ (48,117)
=========== ============ ===========

Weighted average common shares
outstanding 15,516,063 14,590,265 14,175,065
Weighted average options and
warrants treated
as common stock equivalents -- -- --
----------- ------------ -----------

Primary number of shares 15,516,063 14,590,265 14,175,065

Incremental weighted average
options and
warrants treated as common stock
equivalents for fully diluted
purposes 276,983 -- --
----------- ------------ -----------

Fully diluted number of shares 15,793,046 14,590,265 14,175,065
=========== ============ ===========

Earnings (loss) per share of common
stock
before extraordinary item and
change in
accounting principle
Primary $ 0.54 $ (2.12) $ (3.02)
Fully-diluted 0.53 * *

Earnings (loss) per share of common
stock from
extraordinary item
Primary $ -- $ -- $ (0.23)
Fully-diluted -- -- *

Loss per share of common stock from
change
in accounting principle
Primary $ -- $ -- $ (0.14)
Fully-diluted -- -- *

Net earnings (loss) per share of
common stock
Primary $ 0.54 $ (2.12) $ (3.39)
Fully-diluted 0.53 * *

</TABLE>
* Fully diluted earnings per share are anti-dilutive

<PAGE>

EXHIBIT 22.1

WORLDCORP, INC. AND CONSOLIDATED SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

Name Jurisdiction
---- ------------

World Airways, Inc. Delaware

World Airways Cargo, Inc. Delaware

WorldCorp Investments, Inc. Delaware

World Flight Crew Services, Inc. Delaware

WorldGames, Inc. Delaware

US Order, Inc. Delaware

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
WorldCorp, Inc.:

We consent to incorporation by reference in the registration statements (Nos.
33-57247 and 33-44245) on Form S-3 and registration statement (No. 33-33468) on
Form S-8 of WorldCorp, Inc. of our report dated March 13, 1995, relating to the
consolidated balance sheets of WorldCorp, Inc. and subsidiaries as of December
31, 1994 and 1993, and the related consolidated statements of operations,
changes in common stockholders' deficit, and cash flows and the related
consolidated financial statement schedule for each of the years in the three-
year period ended December 31, 1994, which report appears in the December 31,
1994 annual report on Form 10-K of WorldCorp, Inc. Our report refers to changes
in the method of accounting for postretirement benefits other than pensions and
income taxes.

KPMG PEAT MARWICK LLP

Washington, D.C.
March 31, 1994

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL IMFORMATION EXTRACTED FROM FORM 10-K
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 8,828
<SECURITIES> 0
<RECEIVABLES> 5,829
<ALLOWANCES> (81)
<INVENTORY> 0
<CURRENT-ASSETS> 28,432
<PP&E> 39,704
<DEPRECIATION> (12,657)
<TOTAL-ASSETS> 97,536
<CURRENT-LIABILITIES> 62,358
<BONDS> 109,368
<COMMON> 15,492
0
0
<OTHER-SE> (103,685)
<TOTAL-LIABILITY-AND-EQUITY> 97,536
<SALES> 0
<TOTAL-REVENUES> 204,440
<CGS> 0
<TOTAL-COSTS> 223,149
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 436
<INTEREST-EXPENSE> 12,154
<INCOME-PRETAX> 10,496
<INCOME-TAX> 159
<INCOME-CONTINUING> 8,308
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,308
<EPS-PRIMARY> 0.54
<EPS-DILUTED> 0.53

</TABLE>